Every now and again the sheer and absolute lunacy of being a beef farmer, a suckler farmer especially, strikes me like a hammer between the two eyes. Leaving other primary producers to the side, what other business would spend up to two and a half years investing in and manufacturing a product without having any idea what they are going to get paid for it?
We also have very little control over the cost of the main inputs needed to produce the product. Not exactly a good business model to go to the bank with, if you’re looking for a loan! Always prices takers, never price makers.
One such hammer blow moment came last week during a visit to last week's Newford Farm open day in Athenry. A number of my fellow discussion group members along with our Teagasc advisor Gary Fisher decided to take a couple of days sabbatical and visit a few farms in the west including the Newford Farm.
First of all, let me say that Newford Farm is very obviously a fantastically well-run enterprise. I don’t think for a minute that Matthew Murphy, the farm manager and any one else involved in the running of the farm, could do any more than they are doing.
All farm management and husbandry targets are being met, be it in grass growth, calving interval, calf mortality etc. Any farmer would be proud of Newford's figures. But unfortunately, when it comes to their bottom line the figures from this Angus X Friesian suckler herd, finishing both heifers and steers just doesn’t add up. In 2016 the farm's net loss was €12,800. The net profit for 2017 was €4,928. As far as I’m aware these figures do not include labour.
The factories want us to produce steer beef instead of bulls, and they can’t manage to do it themselves!
It's probably important to mention that Newford does not have a single farm payment. As one of the stakeholders, Dawn meats can very obviously see that this system, of steer beef particularly, does not pay. Whether they care or not is a different matter. A colleague of mine said to me during one of the presentations: “The factories want us to produce steer beef instead of bulls, and they can’t manage to do it themselves!”
I’m sure that the management team will sit back now and review the situation, I know that they are already looking at changing the cow type slightly to give better terminal figures. Maybe bull beef will be looked at also. But at the end of the day, there is only so many changes they can make, especially when the farm is achieving a high level of performance.
We’ve been told for years to concentrate on changing the things that we can control, things inside our own farm gate. Try to obtain the highest level of weight gain that we can from cheap grazed grass, spend more money on fertiliser that you do on meal. Try to achieve a tight calving pattern, a calf per cow every 365 days. Don’t carry passengers, if an animal is not performing get rid of it. Monitor soil fertility, spread P, K, and lime where necessary to grow as much grass as possible.
Technical performance
Millions of euro have been spent on research and development in Grange and other such places to be able to improve technical performance within the beef industry. Irish farmers have bought into this research, have listened to their advisors and there is no doubt that huge achievements have been made. Irish farmers are among the most technically proficient in the world. But there does come a point where you have to look at the price being offered for beef and ask does it make sense to keep producing at that price?
McDonalds, another of Newford Farm's stakeholders, had a stand present at last week's open day. There, one of their representatives told us that they were there to promote sustainability. When asked how sustainable she thought Newford's financial figures were, the only answer the lady could give was “not very!”
Hopefully this lady will carry that message back to her superiors. We’ve been complaining about beef price for as long as I can remember and probably twice as long before, but still we keep producing.
The beef processors and supermarkets could probably double the price of beef to the farmer and they would still be left with a reasonable profit
The simple fact of the matter is that the beef processors and supermarkets could probably double the price of beef to the farmer and they would still be left with a reasonable profit. Obviously down to their greed and our willingness to keep producing, that is very unlikely to happen. However, I really do believe that the day is coming, not too far down the line, where farmers are going to say enough is enough. There’s no point working for nothing.
Maybe Brexit will be the straw that breaks the camel's back, who knows. I’ve said it before, but if the suckler cow disappears, a lot of our landscape will change dramatically and beef processors will have to start paying a proper price for the remaining dairy bred beef. Of course, by then it will be too late!
Newford Farm Open Day 2018: Breeding performance
€5/kg needed to break even on Dawn Meats demo farm
Newford Farm Open Day 2018: Maintaining focus in a difficult farming year