Farmer Writes: economics and entertainment, a dangerous combination

Economics and entertainment, the two Es of the Irish beef sector that battle it out for the headlines, have been flying high over the last few months.

On the entertainment side, prices for showing commercial cattle have been on a high plateau for 12 months and have the potential to bring a bit of younger blood into the sector.

I’m always wary of it as it’s an artificial marketplace.

Perhaps that’s because I’m boring and prefer to look at the cost side of things but I do see it as a great way to get people involved and improve their animal husbandry skills.

Translating that interest into future beef producers won’t be easy. Access to land and profitability are two key issues facing beef farming. Access to land will vary on geography and the outlook of those currently farming it, so there’s less control on that.

No control

Even though there is no control on price, there’s scope for some individual control on profitability as it’s the farmer who dictates what system and inputs to use.

As we’ve seen over the last few years, international events can lead to huge variance in market trends for both input and output prices.

Beef prices have been going well as the supply and demand sweet spot has been in farmers’ favour over the last few months.

Looking at the deficit of beef in Europe, and the demand for protein all around the fringes of the Mediterranean, offers some positivity.

We’re not the only ones looking at that either and after being kept at bay by the EU’s much maligned Green Deal since 2019, the shadow of a Mercosur trade deal is drawing closer.

In a way, we’ve been indirectly competing with them on the fringes of Europe as cattle from Uruguay have been making the journey across the Atlantic to Turkey.

We sometimes forget how the EU protects us from the economic reality our competitors face.

At about 324m head, the combined cattle herd of the five countries involved in the Mercosur bloc – Argentina, Bolivia, Brazil, Paraguay and Uruguay – is 4.5 times that of the EU total.

Production standards

As a country that exports so much beef, we can’t expect the deal to be binned but equal production standards must be met and achieving that is what Irish and EU politicians need to focus on.

It’s some consolation that the deal in place has agreed that the beef will enter the EU on a carcase weight equivalence (CWE) basis. That is the total carcase weight including the bones rather than on product weight. That reduces the risk of what happened UK farmers in 2021.

The story goes that discussions around the free trade deal with Australia were reaching a crescendo and then prime minister Boris Johnson was entertaining his opposite number, Scott Morrison, at a dinner in Downing Street.

A central issue up was whether the Australian beef allowed into the UK would be measured by product weight or CWE. Product weight meant an opportunity to get more premium steak cuts included and towards the end of proceedings Johnson gave them what they wanted and the Australians wasted no time in getting him to sign it.

We’ll be feeling the consequences of that deal in time to come too, but that brief synopsis of the post-Brexit trade deal is a good lesson of the dangers of mixing entertainment and economics.