Pickets won’t resolve issues in meat sector

The stand-off between farming organisations and the beef industry in recent weeks has been an interesting spectacle. Behind the headlines there are a number of uncomfortable truths and it will require much more than pickets to change them.

It is a fact that Irish farmers have no ownership or equity in the beef processing sector. That, alone, adversely affects their ability to derive wealth creation from the processing of their cattle. It was not always like that. In the 1980s Cork Marts, a farmer controlled co-operative, controlled a large meat processing business called IMP. It failed. Later, Kerry Group, another farmer controlled entity, acquired a meat factory and threw its best management brains at it. It failed too. These two expensive engagements ended the ownership experiment for Irish farmers. Kerry and Avonmore Foods (the precursor to Glanbia) also owned pigmeat and lamb processing facilities. Those were either sold or closed down as the returns were simply insufficient to warrant continuing.

Meat processing is a highly competitive and challenging business to enter. It is dominated by ferociously competitive operators who would respond aggressively to any new entrant to their marketplace. It would require deep pockets and a gritty determination for any enterprise to enter the beef processing market, yet if farmers really want a say at the table they will need to think strategically and prepare to put a lot of skin in the game.