It’s time the Government brought order to bear within the beef market
COMMENT: Bord Bia’s results for 2013, published today, begin to shed some light on the complicated world that is beef processing here in Ireland. Courtesy of the figures we now know that the beef sector enjoyed 10 per cent growth last year, in terms of its export value to the economy as a whole. Of this overall figure, fiver per cent was accounted for by an increase in physical output: the more than significant remainder as made up by an increase in market returns.
Hardly a week has gone by over recent times without the Taoiseach or Agriculture Minister Simon Coveney announcing new, value-added Irish beef supply contacts in a host of markets around the world. And in each case, emphasis has been placed on beef processers being able to secure a ‘premium’ return from these new outlets.
Meanwhile, Irish beef finishers have been running around like headless chickens for the past year and more trying to keep up with the ever-changing specification criteria enacted by the meat plants. The most recent debacle in this regard was the decision to penalise the prices paid for young bulls over 16 months of age.
And, of course, adding insult to injury was the plants’ decision to cut prices in the mouth of Christmas – traditionally the one period in the year when farmers could have expected a decent return for their cattle.
Beef producers have every right to be angry at the present time. They believe they are being short changed when it comes to the prices available for their cattle. There is total transparency when it comes to assessing how farmers actually go about their business. The Department of Agriculture, Teagasc and a range of other bodies publish reams of information on calf and store cattle prices plus all farm input costs on a regular basis. In total contrast there is no transparency, whatsoever, when it comes to assessing how the meat plants go about their business. Nor do these companies make any attempt to explain the relationship between the returns they receive for the range of products brought to market and the price they pay for finished cattle.
Transparency counts for nothing when it is a one-way ticket only. Every business exists to make profit. But it seems to be forgotten, within certain quarters, that farmers are also businessmen and businesswomen. They, too, must be allowed to generate an acceptable margin from their business activities.
Farmers have every right to know what type of margin processors are making form the raw material they are supplying. In short, the beef supply chain is broken: it’s time the Government set about fixing it. And this means telling the processors that they must come clean on the margin they make from their activities