Stephen Cadogan: Why dairy beef incentive could be such a valuable incentive

Stephen Cadogan: Why dairy beef incentive could be such a valuable incentive

The dairy beef production incentive which ICMSA has called for would be a rare item of good news in the beef sector, if Agriculture Minister Michael Creed were to go along with it.

It could be good news for dairy farmers also, if they want more farmers to take on the rearing of the increasing population of dairy calves, or dairy heifer contract rearing.

Farmers are needed to take on both of these tasks for the rapidly expanded dairy industry. Without a beef (or veal) outlet for surplus dairy calves, or contract heifer rearing to take the environmental pressure off heavily stocked dairy farms, the milk sector could face increasing problems.

ICMSA President Pat McCormack said sufficient markets are needed in the spring for calves, in order for the dairy sector to remain sustainable. That means the live export market must remain open for dairy-bred beef calves, and there must be support for farmers willing to rear the beef cross calves here in Ireland.

Mr McCormack said dairy beef has been demonstrated to be the most profitable beef production system, albeit returns are still low in all parts of the beef sector, leaving farmers under very significant financial pressure.

Hence the ICMSA suggestion that beef cross calves from the dairy herd be subsidised to the value of €150 in two payments, at 6-10 months and at slaughter. The calves would have to be sired by a beef bull with good beef characteristics, and ICMSA also recommended that farmers be allowed to exit the BDGP scheme early without clawback of payments, in order to enter their proposed dairy calf scheme.

Such a scheme could be a saviour for the very small group of top beef farmers who have been consistently capable of profitable rearing and fattening, until they were set back by the challenges of 2019, due to low prices for their cattle.

These farmers tend to be larger-scale producers operating to a high level of efficiency. They should be prime candidates for dairy calf to beef, or dairy heifer contract rearing.

According to Teagasc director Professor Gerry Boyle, the vast majority of beef producers do not generate a profit margin, and survive on what is left of their single farm payment after the losses are counted.

The failure of many suckler cows to produce a calf per year is one of the profitability problems (and the calving frequency is worsening rather than improving), further exacerbated this year by the slump in beef prices.

A very large group of part-time farmers are involved in production of beef. Some of them are exceptionally efficient, but they are hindered by time constraints. Perhaps some of them will give up loss-making beef farming, to concentrate instead on their off-farm work.

A significant proportion of beef farmers are elderly, and find it very challenging to manage their herds, not to mind try new enterprises like dairy calf rearing or dairy heifer rearing. They are unlikely to be receptive to the new technology which plays a big role in advancing every farm enterprise.

The Teagasc plan for them is to tailor measures to help them maximise retention of their single farm payments.

Teagasc director Professor Boyle says expansion in dairy can be leveraged for the benefit of other farmers, particularly traditional dry stock farmers, and Teagasc is promoting a number of initiatives in that respect, but is aware of the challenge in communicating such opportunities to farmers.

Teagasc encourages traditional dry stock farmers to look very closely at the possibilities in heifer rearing, for example, for a more continuous level of income, and at rearing dairy calves. But it is challenging, because beef sector demographics do not encourage people to embrace change, says Professor Boyle.

He noted that leadership played a big role in the expansion of the suckler herd in the 1990s, and the beef sector needs similar leadership now.

As it stands, the sector is poorly prepared to take on the increasing number of dairy calves coming on the market, to be reared as beef animals.

That is why the dairy beef production incentive which ICMSA has called for could be such a valuable incentive.

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