Letter to the editor: ‘How long is the vision for beef farmers in Ireland?’
Within a typical food-chain – from producer to processor to retailer to customer – the various stages, and the people involved, are separate from each other.
The only time they meet is at a moment of commerce when a product is exchanged for money. This is healthy for a food chain, allowing people at each stage control over their product and preventing too much influence by a single player.
Looking at the current strong trading prices in marts, there is increasing evidence that there are changes within the food-chain for beef.
Mart prices are excessive for what the average farmer could reasonably expect to receive back for a finished animal from a beef processor. Any beef production system would be running on slim margins of profitability.
Moving along the food chain, Irish beef processors have looked further afield for methods to both develop their business operations but also to safeguard their vast profits.
Pressure on price margins
In 2018, 5% of the annual number of beef animals – around 90,000 animals – processed in Ireland came from factory-owned or factory-controlled lots.
With almost 600 feedlots in Ireland, this percentage will be higher as privately-owned feedlots will have exclusive contracts with processors.
The prices farmers receive from beef processors fluctuates up and down during the year depending on how many finished animals are presenting to factories.
Higher prices are typically available in the summer for farmers finishing animals from grass.
But, as beef processors now have a supply of animals through privately-owned or contracted feedlots, price control will continue with a downward pressure being applied to prices offered to farmers.
Stronger mart prices, driven by feedlot agents, will put further pressure on price margins for farmers requiring replacement animals.
The future of beef farming?
Last year, Ireland witnessed a series of protests outside beef processors from groups of committed farmers.
This brought the issue of low factory-gate prices and high profit margins for processors and retailers to the public attention.
The Department of Agriculture was scrambling to get a hold on the situation as it was afraid that the full extent of profit-making by a thin slice of the production chain would be revealed.
By being able to withhold their finished animals (and prevent others entering the beef factories), farmers could act together and make demands by stopping production.
However, the continued expansion of factory-owned or contracted feedlots, providing an increased supply of beef animals in the future, will greatly weaken any future protests over agriculture policy.
Some parties will not be focused beyond the term of the next government.
They will be content with processors and retailers retaining control, with family farms only surviving due to the intensification required to meet the pressure of lower prices for higher-quality animals.
Other parties will be focused on the future of farming beyond the short-term, seeking to ensure a future for beef farmers by being committed to the farmer, animal welfare, the environment and their local community.
This choice does matter – for now and for future generations.
From Keith Adams, social policy advocate at the Jesuit Centre for Faith and Justice