Bold action and strong leadership needed for beef industry
Typically, in times of crisis, bold action is required, tough decisions are made and leadership is shown. Yet, 12 months into this beef crisis, stakeholders on all sides are still finding faults and excuses, rather than putting forward remedies to ensure the future success of beef production in Ireland.
The beef forum needs to deliver a documented roadmap that will bring clarity to the following issues.
Markets & Prices
The graph below shows a British-Irish price gap that has been spiralling upward in recent years. So, why have industry stakeholders waited until now to kick-up a fuss about it?
Let’s face reality, British consumers are buying more British beef. Seven of the 10 largest supermarkets in the UK exclusively sell 100% British beef.
Evidence of these consumer trends are borne out in the latest CSO beef export figures. They show Irish premium boneless chilled beef exports to the UK from January to August 2014 to be down 15% in carcase volume terms, whereas exports of lower value boned and frozen has increased by 67%. Beef industry stakeholders need to channel their efforts towards opening up new markets for Irish beef.
Last year, the Livestock and Meat Commission in Northern Ireland produced a straightforward two-page document clearly outlining stock specifications, requirements and penalties for Northern Ireland beef farmers. This simple written testament is as clear as it is concise. Why can’t a similar document be agreed upon in the Republic of Ireland?
Supply & Demand
Between 2005 and 2012, factory throughput in Ireland showed steady decline. However, steer and heifer throughput in 2014 is 27% higher year-to-date when compared with the same period in 2012.
One possible means to rectify a supply imbalance would be to temper factory throughput with an increase in live exports. Looking at the trends over the past five years, the export of both calves and weanlings was lowest in 2012. This helps explain the glut of cattle in 2014.
The industry records and tracks all the necessary figures to predict medium-term supply trends. Why doesn’t it use these figures to pro-actively help manage supply? Is the Irish beef industry about to sleep-walk into another crisis of oversupply with the impending increase in dairy cattle numbers following milk quota abolition in 2015? Dairy bull calves prices are currently 21% higher than they were this time last year.
Farmers will recall the solidarity shown in 2005 and 2006 when Brazilian beef imports into Ireland reached their peak. In the years leading up to this action, beef imports into Ireland averaged less than €50 million per annum. Over the past three years, beef imports (excluding offal) have averaged in excess of €100 million per annum. For an industry that takes pride on being a global beef exporter, industry stakeholders cannot stand back and casually watch beef import values double in the space of a decade.
There were claims of over 10,000 beef farmers protesting outside factories two weeks ago, but only about a fifth of this number completes beef e-Profit Monitors every year. The Minister for Agriculture, Food and the Marine’s initiative to set up producer organisations could prove to be a moot point unless industry stakeholders rectify the issue of profitability inside the farm gate.
Each of the five areas highlight industry risks that could have been better mitigated and managed proactively. The frustration and mistrust among farmers on the ground is palpable. Yet, with every difficulty comes opportunity. Both the farming unions and the processors have both the opportunity and responsibility to formulate a transparent strategy that will reignite confidence in the Irish beef industry. Such a roadmap should deliver long-term value and ensure fair market returns for all stakeholders. The time for finger pointing has passed. Positive solutions are required this week.