This week, we detail the issues discussed during crisis talks between Meat Industry Ireland (MII), the representative body for the meat processing sector, and the farm organisations. While the focus is on the lack of profit within the sector, Adam Woods questions whether the issues raised would – if delivered – actually return higher prices back to farmers.
Yes, a review of the Quality Payment System (QPS) and changes to how farmers are rewarded for quality assurance could undoubtedly be presented as a win to farmers. However, the reality is that in both cases it is simply a matter of shuffling the same pot of money around.
Any change to the quality assurance payment that would see an increase in the number of animals being paid a bonus would simply be reflected in the base price.
The same principle applies to any review of the QPS, albeit that there is a strong scientific argument for increasing the price differential across each subclass. But in neither case is there a guarantee that the pot of money being passed back to farmers would increase.
While the farm organisations are right to focus on increased transparency around carcase trim, the proposal being put forward will not deliver the desired outcome. Placing weighing scales within the factory to have animals weighed live prior to slaughter will give farmers no insight into how carcases are being trimmed. Killout percentages for the same class of animal can vary by 5-6% with gut fill, fat class and grade all having an impact.
Insisting processors take an image of each carcase prior to weighing and grading would be a much better alternative. In an era where it is possible for the Department of Agriculture to take images of fields from space, surely the technology exists to take an image of each carcase that would allow farmers to identify where they have been over-trimmed.
One simple measure that is missing from all of the demands put forward is for each beef processing facility to publish the number and class of animals slaughtered each week. Such a move would allow for total transparency in relation to the management of throughput.
One simple measure that is missing from all of the demands put forward is for each beef processing facility to publish the number and class of animals slaughtered each week
However, while demanding changes at factory level is both worthwhile and necessary, the reality is that even if we had a beef sector that was 100% transparent, suckler and beef farmers would not be making a viable income from the market alone. Ultimately the future of the Irish suckler herd will be shaped by political decisions in relation to the level of support under the next CAP and any Brexit fund.
In the context of climate change and the future of the suckler herd, it seems to have come as a surprise to many that suckler beef production in the absence of supports is not profitable.
What makes this strange is that the sector has never been profitable without supports. Nowhere in the world is suckling economic unless farmers have access to one or more of the following:
Large tracts of low-value land that can only support very low stocking rates. Growth hormones to enhance performance of progeny.Low food safety and environmental production standards that reduce costs. Support payments that compensate for low market prices.Without access to large tracts of low-value land and having to produce to the highest food safety and environmental standards in the world, it has always been recognised that for suckler beef production to be viable in the EU, farmers require supports. It is the reason 23 member states have coupled payments in place for suckler farmers. We should not lose sight that the vast bulk of funding delivered under the current CAP model links back to supports generated from historic activity in our suckler and beef sector.
It is easy to point out what other member states have done to support the suckler sector and ignore the fact that, in many cases, the funding for these payments was generated from top-slicing all farmers’ basic payment. While an extremely politically sensitive issue, the reality is that it is a conversation that needs to happen in the context of the next CAP reform and when discussing the future of our national suckler herd.
We can tinker around the edges with movements, QPS and age limits but the reality is that the profitably of suckler beef production has always and will continue to be shaped by political decisions relating to support payments.
It is positive to see all farm originations standing together in recent days on the immediate issues facing the sector. But real delivery for suckler farmers will only be achieved if they can continue to do this in relation to shaping further support payments under the CAP and in relation to securing an adequate fund to protect the sector from the fallout of a no-deal Brexit.
Climate change: report highlights flaws in Mercosur deal
Elsewhere, we report on the publication of another climate change report, this time from the Intergovernmental Panel on Climate Change (IPCC). Once again, we see broad, sweeping statements being made on various aspects of food production and their impact on the environment. While the authors acknowledge that it is not the intended purpose of the report to influence people’s eating habits, this is inevitably how their analysis is presented to the general public.
What also received much less attention was the fact that the IPPC identifies that temperate grass-based beef and dairy production models, as utilised in Ireland, should be promoted.
The report specifically recognises carbon leakage as a major threat – eg where sustainable production models are compromised only for production to move to less carbon efficient and less regulated locations.
Despite the authors recommending that carbon leakage be incorporated into multilateral trade deals, we see the EU pushing ahead with a Mercosur beef deal that will do exactly what the IPCC has warned against.
Dairy: milk price cuts take industry by surprise
The latest round of milk price cuts have come as a surprise. On the supply side, we have industry commentators telling us global milk supply is back and has been all year – in theory that should help price.
On the product side, butter is back to slightly over €3,000/tonne, but the additional Kerrygold premium is helping underpin prices and powder prices are holding. Yet we see our two big players cut July milk price at a crucial time of the year. It’s hard to stack up the Glanbia and Kerry price moves.
Longer term, we see analysis that Ornua is returning more to co-ops than some of our big processors are able to return to farmers. Yet Ornua is a business in flux at board level as the players around the board table squabble over who, what, when and where to sell products generated on Irish dairy farms. Surely the sole objective should be adding value and premiumising the uniqueness and quality product produced. Dairy farmers need a real and truthful debate on Ornua (Kerrygold) and where the future marketing potential lies.
Tullamore Show: rural resilience
All five of the senior female class winners which were all property of Garrett and Lyndsey Behan of the Clonagh herd. Included in the five are both the overall champion Clonagh Delightful Fabulous and reserve overall Clongah Darling Eyes. \ Alfie Shaw
Despite taking place against a backdrop of real challenges within the beef sector, the mood among those attending Tullamore Show was generally positive. The quality of stock on display across the various show rings was testimony to the passion and commitment for livestock breeding that exists at all ages in many farm families.
The organising committee deserve great credit for ensuing that, in the face of commercial influences, the show retains its deep connection with the farming community.
This week, we detail the issues discussed during crisis talks between Meat Industry Ireland (MII), the representative body for the meat processing sector, and the farm organisations. While the focus is on the lack of profit within the sector, Adam Woods questions whether the issues raised would – if delivered – actually return higher prices back to farmers.
Yes, a review of the Quality Payment System (QPS) and changes to how farmers are rewarded for quality assurance could undoubtedly be presented as a win to farmers. However, the reality is that in both cases it is simply a matter of shuffling the same pot of money around.
Any change to the quality assurance payment that would see an increase in the number of animals being paid a bonus would simply be reflected in the base price.
The same principle applies to any review of the QPS, albeit that there is a strong scientific argument for increasing the price differential across each subclass. But in neither case is there a guarantee that the pot of money being passed back to farmers would increase.
While the farm organisations are right to focus on increased transparency around carcase trim, the proposal being put forward will not deliver the desired outcome. Placing weighing scales within the factory to have animals weighed live prior to slaughter will give farmers no insight into how carcases are being trimmed. Killout percentages for the same class of animal can vary by 5-6% with gut fill, fat class and grade all having an impact.
Insisting processors take an image of each carcase prior to weighing and grading would be a much better alternative. In an era where it is possible for the Department of Agriculture to take images of fields from space, surely the technology exists to take an image of each carcase that would allow farmers to identify where they have been over-trimmed.
One simple measure that is missing from all of the demands put forward is for each beef processing facility to publish the number and class of animals slaughtered each week. Such a move would allow for total transparency in relation to the management of throughput.
One simple measure that is missing from all of the demands put forward is for each beef processing facility to publish the number and class of animals slaughtered each week
However, while demanding changes at factory level is both worthwhile and necessary, the reality is that even if we had a beef sector that was 100% transparent, suckler and beef farmers would not be making a viable income from the market alone. Ultimately the future of the Irish suckler herd will be shaped by political decisions in relation to the level of support under the next CAP and any Brexit fund.
In the context of climate change and the future of the suckler herd, it seems to have come as a surprise to many that suckler beef production in the absence of supports is not profitable.
What makes this strange is that the sector has never been profitable without supports. Nowhere in the world is suckling economic unless farmers have access to one or more of the following:
Large tracts of low-value land that can only support very low stocking rates. Growth hormones to enhance performance of progeny.Low food safety and environmental production standards that reduce costs. Support payments that compensate for low market prices.Without access to large tracts of low-value land and having to produce to the highest food safety and environmental standards in the world, it has always been recognised that for suckler beef production to be viable in the EU, farmers require supports. It is the reason 23 member states have coupled payments in place for suckler farmers. We should not lose sight that the vast bulk of funding delivered under the current CAP model links back to supports generated from historic activity in our suckler and beef sector.
It is easy to point out what other member states have done to support the suckler sector and ignore the fact that, in many cases, the funding for these payments was generated from top-slicing all farmers’ basic payment. While an extremely politically sensitive issue, the reality is that it is a conversation that needs to happen in the context of the next CAP reform and when discussing the future of our national suckler herd.
We can tinker around the edges with movements, QPS and age limits but the reality is that the profitably of suckler beef production has always and will continue to be shaped by political decisions relating to support payments.
It is positive to see all farm originations standing together in recent days on the immediate issues facing the sector. But real delivery for suckler farmers will only be achieved if they can continue to do this in relation to shaping further support payments under the CAP and in relation to securing an adequate fund to protect the sector from the fallout of a no-deal Brexit.
Climate change: report highlights flaws in Mercosur deal
Elsewhere, we report on the publication of another climate change report, this time from the Intergovernmental Panel on Climate Change (IPCC). Once again, we see broad, sweeping statements being made on various aspects of food production and their impact on the environment. While the authors acknowledge that it is not the intended purpose of the report to influence people’s eating habits, this is inevitably how their analysis is presented to the general public.
What also received much less attention was the fact that the IPPC identifies that temperate grass-based beef and dairy production models, as utilised in Ireland, should be promoted.
The report specifically recognises carbon leakage as a major threat – eg where sustainable production models are compromised only for production to move to less carbon efficient and less regulated locations.
Despite the authors recommending that carbon leakage be incorporated into multilateral trade deals, we see the EU pushing ahead with a Mercosur beef deal that will do exactly what the IPCC has warned against.
Dairy: milk price cuts take industry by surprise
The latest round of milk price cuts have come as a surprise. On the supply side, we have industry commentators telling us global milk supply is back and has been all year – in theory that should help price.
On the product side, butter is back to slightly over €3,000/tonne, but the additional Kerrygold premium is helping underpin prices and powder prices are holding. Yet we see our two big players cut July milk price at a crucial time of the year. It’s hard to stack up the Glanbia and Kerry price moves.
Longer term, we see analysis that Ornua is returning more to co-ops than some of our big processors are able to return to farmers. Yet Ornua is a business in flux at board level as the players around the board table squabble over who, what, when and where to sell products generated on Irish dairy farms. Surely the sole objective should be adding value and premiumising the uniqueness and quality product produced. Dairy farmers need a real and truthful debate on Ornua (Kerrygold) and where the future marketing potential lies.
Tullamore Show: rural resilience
All five of the senior female class winners which were all property of Garrett and Lyndsey Behan of the Clonagh herd. Included in the five are both the overall champion Clonagh Delightful Fabulous and reserve overall Clongah Darling Eyes. \ Alfie Shaw
Despite taking place against a backdrop of real challenges within the beef sector, the mood among those attending Tullamore Show was generally positive. The quality of stock on display across the various show rings was testimony to the passion and commitment for livestock breeding that exists at all ages in many farm families.
The organising committee deserve great credit for ensuing that, in the face of commercial influences, the show retains its deep connection with the farming community.
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