COMMENT: Recent weeks have confirmed just how volatile Europe’s beef markets can be. It seems that even small fluctuations in demand can have quite dramatic effects on producer returns, across all categories of finished cattle. Add in the associated debacle over bull beef and it’s hard not to conclude that beef finishers are facing an uphill battle, just to survive, over the coming months.
All of these negative market related developments, that have served to knock producer confidence for six, bring home the absolute necessity for Agriculture Minister Simon Coveney to put in place a Common Agricultural Policy (CAP) package for Ireland that gives the beef finishing sector a fighting chance moving forward.
The old adage of the single farm payment helping to bring livestock farmers to a break-even scenario in a bad year while the same payments constitute the actual profits that most livestock farmers in the good times is, indeed, a true one.
Within the context of any agreement, there will be winners and losers. Most intensive beef finishers now realise that they will find it hard to retain their current single farm payment support levels post 2015. Any decision that marks the introduction of a process that leads to the establishment of a flat rate Pillar 1 support mechanism will preferentially favour those farmers that are extensively stocked. And given the decisions made in Brussels last June, this is a reality that agriculture in Ireland will have to accept.
From the perspective of beef finishers, the only deal in town that now makes sense is to have the transition to the new support arrangements made as long as possible. And, in this context, 10 years seems to be a period of time that could be regarded as acceptable.
The real challenge ahead for Irish agriculture is to find the means of significantly expanding food output on a sustainable basis. And red meat must be an integral part of this. It should not be overlooked that lowland beef finishers are not eligible for any additional EU support payments. The reality is that livestock farmers in the hill areas, who will gain from the new Pillar 1 arrangements do get top ups from Brussels – and justifiably so.
Ireland needs a vibrant and sustainable beef industry moving forward. And that means ensuring that the future support needs of farmers producing weanlings and those finishing them are met in equal measure.