Troubled times may well lie ahead for the beef sector

COMMENT: Forget the young bull issue: there is now every indication that the beef sector will have bigger problems to deal with as we move into the spring months.

The reality is that the prospects for finished cattle prices – across the board – do not look good. So yet again the spectre of volatility has come to haunt the local beef sector. So what can be done to alleviate this problem for the long term? In truth, the only solution is that of farmers forging long-term contract supply arrangements with the plants, at least for a proportion of their annual kill.

The days are long gone when farmers could afford to play the market. The costs of all inputs, never mind store cattle, are far too high to absorb by the average producer, in the event of prices collapsing at short notice.

Vertical integration has worked tremendously well for the poultry meat and egg sectors: so why can the same principles not be brought to bear when it comes to the beef industry?

In the past, experts have said this could never be achieved because of the beef industry’s fragmented nature.  But as the old saying goes: necessity is the mother of all invention. And, there is no doubt that our beef industry needs a long-term strategy that will ensure its viability moving forward. At the very heart of this plan must be a recognition that primary producers can be allowed to make a living. If this cannot be achieved, then the props on which the entire beef industry is built will fall. And that will be the end of it.

The good news is that the Government now recognises the potential for growth within the agri-food sectors over the coming years. Significant sums of money will be made available to pump prime the needs of the industry in the not too distant future. So surely, some of this could be used to fund a strategic review of the beef industry.

In referencing this AgriLand is mindful of the beef protests organised by the Irish Farmers Association last week. Hopefully, these actions helped make processors aware of just how strong producer feeling on the issue of farmgate prices is at the present time. But actions of this nature do not represent a long-term solution to the problems facing the beef sectors. That will entire all parties involved sitting down around the one table and bringing some coherent thinking to bear on the matter.

 

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