Reduction in prices gap a cause for concern
For organic beef, while prices of up to €4.40 per kg were reported in the spring, farmers are now talking about €4 — the same price as 2008, and marginally higher than 2007’s €3.80.
Farmers are disappointed with organic beef prices, and link it to Good Herdsman and AIBP now controlling most of the processing market, with organic meat processor Good Herdsman at least partially, and possibly up to 50%, owned by AIBP.
Slaney Meats, who process 30 out of about 150 organic beef animals slaughtered each week, including cattle for the Leitrim Co-op, are also reported to be offering €4 per kg — despite a burgeoning organic export market, and the strong prices for conventionally produced beef.
The price gap has narrowed to 20c to 40c per kg, between organic beef and conventional. However, conventional farmers are likely to save on transport costs, because of the nationwide distribution of processors.
It is also the case that while some costs are lower in organic (because they don’t use chemical fertilisers, pesticides, etc), some costs are higher. In particular, the cost of feed can be twice that of conventional feed.
Though there are specific payments and grants for organic farming, organic certification is another cost not borne by conventional beef producers. And in a context of a reducing price premium, certification becomes a more significant cost.
Farmers I have spoken to have complained about the quality of beef being produced in organic. One farmer said, “It’s all a bit woolly, organic is probably where conventional farming was 10 years ago. We really need to link up with ICBF (the Irish Cattle Breeding Federation) to facilitate record keeping and so on.”
He said, “Organic livestock farming really needs to adopt a professional farming approach and establish targets. Discussion groups would be a start. The training courses are a great starting point, but perhaps a lost opportunity,” he said, referring to the compulsory training courses for those joining the organic farming scheme.
“The farm walks are not challenging enough,” he said, referring to the Teagasc organic farm walks, which continue nationwide.
Farmers have expressed frustration on hearing about the supposed need for more and more organic cattle, voiced at various seminars or conferences, and comparing that with the reality of the prices they are getting. Recently, a new baby food contract was awarded to the Good Herdsman for the German market, which is reported to entail another 700 head of cattle. Last year, it was claimed at an organic conference that there was a shortfall of about 6,000 head of organic cattle to meet export market demand.
John Brennan of the Leitrim Co-op says, “The organic price is still a good one, the issue is really the way conventional prices have surged. There are many reasons for this, including a slump in the national breeding herd, resulting in a scarcity of replacements. There is also increased demand for beef in several key markets.”
Brennan says, “The Irish price for organic beef is in line with the UK prices at present. Cattle will become more scarce in the coming months in organic, which will drive price back up.
“In the UK, the premium is low, but organic farmers really try to reduce input costs. They grow more of their own grains for feed.”
The Good Herdsman were contacted for their comments, but none were forthcoming.
