Beef industry ignores 1998 report's grim forecast and overcapacity worsens
Words like catastrophic and grim peppered the report, which cost about 700,000 euro and which was compiled by international consultant McKinsey.
Back then, the sector comprised 39 meat plants and the number of companies involved was 16.
Since then, the numbers have gone beyond 39 and there are 42 EU-approved slaughtering plants operating in the Irish economy.
Instead of players being taken out, the over-crowded market has been further aggravated by new players getting involved in the sector.
At the time, the report, which failed to generate a response from the industry, argued for a 25% cut in the number of plants, and added that players in the market should be cut from 16 to four.
Cutting the number of players to four might have, in theory, made sense, but the reality is that this sector attracts new entrants in a way no other industry has the capacity to do.
And that has been the case despite the low-margin nature of the business.
Farmers find it hard to accept that the business operates on margins of no more than 2% in most instances, and the stand-off between Larry Goodman and the IFA is a further testament of just how uneasy the relationship is between suppliers and processors.
It is acknowledged that the industry has gone through the worst six months of trading in 20 years, and suppliers and processors are feeling the pinch.
Several factors are at play here, including the unusual fact that we produce ten times more beef than we consume, an overcapacity that proves difficult for those in processing.
The overcapacity issue, and the quality and type of beef produced here, are two key factors that have to be faced up to if the sector is to improve.
The report reckoned that there were huge savings and better profitability if the sector used common sense and commercial reality to dictate practices in the Irish market.
Savings of more than 25 million euro were guaranteed, while a further 18m euro in costs would be eliminated by rationalisation and stream lining of plants.
Hard decisions would lead to savings of up to 200m euro, it said.
They were never made.
Antagonism surfaced because under a proposed compensation scheme, a bid to get players to exit the industry or to downsize.
Larry Goodman, the sector's biggest player, stood to gain a reputed 13m euro under the rationalisation plan.
Since the foot-and-mouth debacle, however, the market has gone through a torrid time. The sector has been struggling as many of its markets were closed to it in the backlash from turmoil in the British beef industry.
It looks now as if the fall-out from the disease crisis is forcing players to take a long and hard look at their available options.
Enterprise Ireland and the government have been active behind the scenes and the word is that more talking has gone on in the past four months about rationalisation than in the previous four years.
Nothing is signed, however, and the high-level discussions could still come to nothing.
One point beginning to emerge is that the Goodman Group will not get massive compensation under the terms being discussed.
On the other hand, anyone expecting 25% of the capacity to vanish as a result of the talks is likely to be disappointed.
Such is the nature of the sector that some involved simply cannot be dissuaded from being directly involved the processing end of the business.
However, the good news is that the sector is at least facing up to the key issues that require resolution.
Other issues such as the type of beef being produced here looks like an issue that is set to run.
For that matter, so too could the rationalisation question, despite the current burst of enthusiasm being displayed for reform.
