Beef Forum agreements – full details

Following lengthy discussions within the Roundtable last night, the Minister for Agriculture, Food and the Marine Minister Coveney secured the agreement of all stakeholders to a comprehensive list of key actions to address the concerns raised by beef farmers in recent months.

The agreed actions include:

• Weight Specifications – no price penalties based on weight up to December 31, 2015.
• Age Specifications – engagement with the retail sector and third country markets with the objective of increasing age specification for premium beef from 30 to 36 months.
• Quality Payment System (QPS) – no dual base pricing for breed, age or weight
• Quality Payment System – Review of current QPS by the middle of 2015
• Quality Assurance – processors to provide a price incentive for all steers and heifers from Quality Assured farms with effect from  January 1, 2015
• Farm movements – clarification and harmonisation of the system for counting the number of farm residencies for determining eligibility for the QPS in-spec bonus. Any barriers to movement through marts will also be examined.
• Price Transparency – new market index to be developed based on the different beef categories on the main markets served by Irish product
• Price Transparency – harmonised remittance document for farmers showing base price, bonuses and any other factors contributing to final price.

Speaking after nine hours of negotiations at the Beef Roundtable, the Minister for Agriculture, Food and the Marine Simon Coveney said the outcome of last night’s discussion was very positive and demonstrated a strong commitment to the beef industry by all of the parties in the forum.

Minister Coveney said it has not been an easy year for beef farmers in Ireland. “Reflecting our strong export focus, there is no doubt that the decline in beef prices across Europe has been felt more acutely in Ireland than elsewhere and I have been particularly mindful of the need to provide measures to alleviate, to the greatest extent possible, the impact of the price decline on farm families.”

Eddie Punch of the ICSA said the proof of the agreements will be in the pudding, as the only real agreement that is tied down is that maximum weights will be gone very soon. “The others involve persuasion and discussion and reviewing but progress has been made.

“We are happy that our campaign, threatening to pull out of QA Scheme, is yielding results. But we are not declaring that campaign over.

“Our campaign that we have been running since September is yielding results on these critical spec issues. We now have real and tangible results,” he said.

Despite failing to achieve any guaranteed price movement, after staging two separate protests, the IFA said it is determined that prices must move on and that increased market returns are passed back to farmers.

“The thousands of farmers who protested at the factories over the unacceptable €350 price gap with the UK have sent a very strong message that cattle prices must increases,” said IFA President Eddie Downey. “Prices have risen by another 5c/kg this week.”

The full list of agreed measures (from the Department of Agriculture) is as follows:

Price Transparency

• The Department of Agriculture, Food and the Marine will continue to publish its Beef Pricewatch app and keep the format and content under review, with a view to maximising price transparency for farmers;
• The current Statutory Price Reporting System based on the R 3 steer is the accepted system for cattle price comparisons across the EU.
• Meat Industry Ireland will work with Bord Bia, other agencies and farm organisations to develop a market index, based on the different beef categories on the main markets and channels served by Irish product, with a view to developing a clear understanding of the market place.
• Meat Industry Ireland will work with its members to develop a harmonised remittance docket for farmers showing base price, bonuses and any factors contributing to the final price paid in a clear and transparent manner within three months.
• Individual meat processors will pro-actively communicate price signals and market requirements to suppliers as early and as transparently as possible.

Weight Specifications

• Processors will agree not to impose any price penalties on any animals based on weight up to 31st December 2015. Farmers presenting heavier stock should provide adequate notice to processing plants.
• In the meantime Teagasc, ICBF and Bord Bia will examine the implications of weight specifications for the profitable production of grass fed beef, particularly for the suckler herd, having regard to market requirements and economic returns for farmers.
Age Specifications

• Processors and Bord Bia will engage with customers and DAFM will engage as soon as possible with competent authorities in third country markets, with a view to increasing the age specification for premium beef from 30 to 36 months, and report back to the next forum on progress.
• Teagasc, ICBF, Bord Bia, and farm organisations will look at the economics of producing beef sustainably to these age specifications, taking into account factors such as the potential market advantage of grass fed beef and the implications for the grass based system of a 30 month finishing age.

Farm Movements

• The industry and Bord Bia will engage with customers with a view to securing flexibility on the number of movements and length of residency and in this regard to remove any barriers to the movement of cattle through marts pre slaughter and ensure the full payment of the QPS bonus to qualifying animals. There will be a progress report to the first forum in the New Year.
• Processors will harmonise the system for counting the four farm residencies for the purposes of determining eligibility for the QPS In spec bonus, to be agreed at the forum;
• The Department will make any necessary adjustments to its AIM system for this purpose, consistent with statutory and traceability requirements.
QPS

• Processors agree that there will be no dual base pricing for steers and heifers in individual processing plants, by breed, age or weight or Quality Assurance status.
• The QPS system will be reviewed, with the assistance of Teagasc, with a view, in particular, to providing a more simple and transparent system, before the middle of 2015.
• Processors agree to a targeted, cost neutral price incentive for all steers and heifers from Quality Assured farms with effect from January 1, based on consideration of an appropriate mechanism to be agreed by then.
• Immediate engagement under the aegis of the forum will follow to ensure progress in this regard.
Contracts

• Individual processors will work closely with their supplier base to increase the use of contracts for suppliers, in particular for winter finishers, to provide greater security for the producers of these animals and assurance to processors in relation to supply
Live Exports

• DAFM will continue to support and facilitate live exports by inspecting and approving vessels presenting for inspection for the purposes of transporting live animals overseas;
• DAFM will continue to work to remove any barriers to the traditional trade for fattening and slaughter with Northern Ireland Authorities and UK retailers.
Producer Organisations

• All participants in the Round Table endorsed the development of Producer Organisations in the beef sector to re balance negotiating power along the supply chain and to provide greater supply assurance to processors, conscious of the importance of existing market organisations. Having received written submissions, DAFM will work with stakeholders to develop proposals for their recognition in accordance with the provisions of the common Market Organisation Regulation, having regard to the concerns of stakeholders.
Trim

• The Department will strengthen controls around trim in meat plants in accordance with EU Regulations.

Bull Beef

• The forum recognises the importance of the bull beef market, and will examine all issues relating to bull beef production systems and market demands at its next meeting in January 2015. In that context, any agreed changes in specifications or QA pricing incentives will be adopted without undue delay.

Forum

The forum will continue to operate and to monitor the implementation of this agreement, deal with any issues arising and ensure that it is fully complied with.

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