Paul Nolan, group development manager of Dawn Meats, spelled out the situation. “We all know very well why we are here; the first question is we have to ask how we arrived at this situation. That’s a question we all had to ask ourselves long and hard over the past few months.”
He commented: “The figures explain an awful lot really. You have to go back to first principles really and ask what our export industry is about. It is now what it has always been, our reputation is based on quality assured steer and heifer grass fed beef.”
“This beef is earning the premium on the top end of the market in Europe. Our beef industry is 70 per cent of the top retailers in Europe, were whether you like it or not is where 70 per cent of top red meat is purchased in Europe.”
Nolan outlined: “What we have seen in January this year is a very interesting scenario. The actual availability of the kill has increased significantly. Within that the steer and heifer kill have upped quite steadily.”
He continued: “If you look back at the first four weeks of the last four years. From 2010 to 2013 the steer and heifer kill has averaged 62,000 for that period. This year the figure is 72,000 a 20 per cent increase. At the same time the young bull kill had an average of 23,000 in the period 2010-2012 and is at 19,000 this year.”
He noted: “All of this dynamic has happened in January, which as we have become over the past number of years more consumer orientated plays a key role. The consumer is the consumer whether Spanish, German, Italian or Irish the all face the same hardships at the moment. There is a European recession; they all have their credit cards bills due.”
Nolan went on to say however that’s only half the equation. “The question I am asking myself is what has gone wrong in terms of the signals. From a Dawn Meats point of view we have worked extremely hard to improve our levels of communication to you our suppliers.
“Our situation is in Dawn is that in 2010 we saw black and white calves leaving this country at around €80 a head, we knew like everybody else that 2015 was approaching ant there would be a inevitable increase in Dairy blood coming into the system. Therefore we were going to be facing 500,000 dairy bull calves a year.”
He cited: “The question was how can we find an alternative to exporting them as calves. It there something Ireland can do as an alternative. We didn’t have the expertise so we invested in projects with Teagasc.”
According to Nolan out of that came a couple of key messages. He stressed: “The only sure market for black and white animals was the under 16 month market. That’s a very difficult product to produce from the Holstein blood, not impossible some suppliers have done it.”
“The second message was. If you’re going to do the next best thing in terms of productivity cost the 16-18 month bull, you have to remember it is 18 months not 18 and a bit. Because if you give an inch you know what’s going to happen.
“The final thing is anything beyond 18 months is Kamikaze. But some people listened to the signals and some didn’t.”
Nolan concluded: “Possibly what happened is that people had some pretty good years with these animals. But all the time that messages was getting stronger we are a steer and heifer nation first and foremost.
“The mystery in a lot of ways is if they are dairy calves a lot of them were born February march 2012. We went public to the media and said on the sums we had done with Teagasc once you go over €130 we could not encourage that behaviour.”
He added: “The second thing is if they were born then why they didn’t die in June 2013 at 16 months or certainly in august at 18 months at a time when traditional prices are at their strongest.”
Limousin heifers on silage. Photo O’Gorman Photography