‘Unless you’re getting €1,000 or better for a weanling, you’re at nothing’ – Punch
‘Meeting the Challenges of Feeding Beef’ was the theme for an event organised by the Irish Cattle and Sheep Farmers’ Association (ICSA), which got underway last night in the Mullingar Park Hotel in Co. Westmeath.
Dr. Alan Kelly – a lecturer in beef production and nutrition at University College Dublin (UCD) chaired the event which saw 50-60 beef farmers and industry experts in attendance.
Eddie Punch – the ICSA’s general secretary – kicked off proceedings on the night addressing the current beef market. He outlined that poor factory prices and mart prices were negatively affecting farmers.
He questioned: “If we don’t have sufficient live export markets, then are we really fooling ourselves to say we can have one million suckler cows?
“Would we be better off with 600,000 or 700,000 suckler cows, but a nice bite for those weanlings when they are being sold in the weanling ring?”
Outlining the fact that factories and retailers don’t want the larger steak cuts, he said: “In my view, unless you’re getting €1,000 or better for a weanling, you’re at absolutely nothing.
“People talk about lighter weanlings making ‘fancy’ prices, but I don’t see the economics of that at all.
No matter how fancy the price is, if the weanling only makes €700, it doesn’t matter how light the weanling is; the cow won’t pay for itself.
“To me, a buoyant future is farmers easily getting a €1,000 or better. And, in order to get this, the question is: Do we need more sucklers or less? – And this is something we need to think about.”
Beef price and transparency
“We’ve had ups and downs in terms of beef prices and there is no doubt that there are ongoing challenges to see if we can have an industry where everybody can make money out of the sector,” he explained.
“Unfortunately, we know only too well that the primary producer is struggling; we have a concern that the primary producer is not getting a fair share from the marketplace.
We have a strong view that the retail sector has to be asked hard questions about what margins they are taking out of the food chain.
“We also want to see more transparency around the food chain and a little more focus on who’s getting what out of it,” he added.
Challenges surrounding Brexit and other trade deals
Punch outlined that scenarios such as Brexit, Mercosur and other trade deals are causing instability and a fear factor around the beef sector which is damaging confidence.
However, he said: “I think that we sometimes can overstate the fears. Brexit has been a source of instability, but at the same time, the UK remains a strong market for our beef.
I think we can talk ourselves into depression about Brexit and I think we need to be careful about that.
Touching on other trade deals, he said: “We are very disappointed with the deal that was done with Canada and we are more concerned that there is still a lot of talk around the Mercosur deal.
“The key concerns we have here is, when you put all of these together, sometimes other sectors gain out of these trade deals; but all of the time, beef is the loser and that’s why we have to fight very hard against trade deals which are unfavourable.”
Earlier today, the Minister for Finance, Paschal Donohoe, announced the availability of funding for a new €20 million beef support package – the Beef Environmental Efficiency Pilot – as part of Budget 2019.
Under the pilot programme, AgriLand understands farmers will receive a payment of up to €40/cow for collecting weight data on cows and calves.
This is something that the general secretary welcomed. He said: “I welcome this announcement; it’s probably less than what people would like, but it is a logical move towards getting better data into the system.
I’m not persuaded that the €200/suckler cow has been fully thought through.
“From an ICSA point of view, we think that it’s not how many suckler cows that are in Ireland that is the real metric; but for those who have suckler cows, are they making any money out of them?
“More needs to be done differentiating suckler beef as a premium product over and above a by-product from the dairy industry.
“When you see Bord Bia market beef throughout Europe and now further afield, you rarely see Jersey cross animals in the marketing material; it is all suckler cows with a content calf that is as ‘happy as Larry’,” Punch explained.
It is no secret that live exports are crucial for the beef industry in Ireland. Live exports this year have increased; however, this is mainly due to the jump in dairy calves being exported and not continental-bred stock.
On this, he said: “Live export is vital to provide competition and it’s under pressure from people who are against it; but there are also more fundamental difficulties.
“The Turkish market – which we thought was a great opportunity for us in 2018 – has more or less collapsed due to political and economical instability in Turkey – a market that had a lot of promise last year.
“The Italian market is doing a little bit better this year. Year-to-date, we are looking at about 20,000 animals gone to Italy, compared to 16,000 this time last year – a marginal increase.
“But, over the last five or six years, live exports to Italy for those quality weanlings has been in the 18,000 to 28,000 bracket.
“So, when I look at the total number of suckler cows, I would think that we need to be thinking of 10-15% of the suckler progeny being live exported and we are not near that at the moment.”
‘Are new markets delivering for farmers?’
On the subject of new markets which have been developed recently, he said: “The question is: If we have too much stock, will we get more from the marketplace or less?
“The challenge is there for the beef industry to expand into new markets and there has been a lot of work done in this regard.
“But, five years ago, the beef price was more stable and somewhat higher in 2013 than it is now with less markets; are these new markets delivering a return to farmers?
“We can’t go on accepting that people will run faster just to stand still. From an ICSA point of view, we want to see an improvement in beef price as soon as possible; but we also want to see farmers making hard decisions themselves.
“A lot of farmers are still doing their best to sell beef as best they can and then some people put beef into factories without knowing what the price is; farmers need to be tougher when they are selling.”
Eddie outlined that the fact that some farmers don’t know what it costs them to produce 1kg of beef is just not good enough.
Touching on advisory agencies, he said: “I think they need to face up and answer hard questions as well. One of the things that drives me demented is the fact they are all the time discussing what is the break-even price for a beef production system.
“We need to discuss what is a fair profit for a beef production system; farmers also need to value their own labour.
“Whether it be suckler farming or beef finishing, we are going to have to try and get a little more analytic and ruthless when it comes to our system of farming.
If we are not, why are we doing it?
“Concluding, he said: “Farmers need to be absolutely more ruthless about: Are we making money? What are our real costs of production? Can we do better in being more efficient?
“But, if we have done our best to be efficient and we are still not making money, why are we doing it? There are a lot of other options out there to justify your time and your energy rather than just feeding cattle for the fun of it.”
There were also some technical presentations on the night. The second speaker who took to the stage was Kepak’s Jonathan Forbes.
He gave a detailed explanation of what the markets want in terms of specifications and what the future holds for beef in 2019.
Richard Moore from Thompson Feeds addressed the crowd on topics such as silage quality and emphasised that farmers must “feed the rumen and not the animal” in order to achieve the best results come slaughter.
Richard also spoke about a recent feeding trial carried out in conjunction with Kepak.
Bruno Martin – from Lallemand Animal Nutrition – outlined the factors which contribute to acidosis. For more on these presentations, stay tuned to AgriLand over the coming days.