Tough year for cattle farmers
UK beef prices have soared to record highs, and more than seven countries have dropped import barriers to Irish livestock products in 2013.
The UK is Ireland’s main export beef export market, taking nearly half of all the beef produced in Ireland.
Meanwhile, up to August, 7,424 cattle (and 22,000 lambs) had been shipped live to Libya, as 2013 saw this trade resume for the first time in 17 years.
Despite the trade developments, it has been a bad year on cattle rearing farms, with Teagasc estimating average income has slumped about 30% (to an average of € 8,500).
This was mainly due to a price slump for young cattle, with weanling prices about 16% lower than in 2013 — although finished beef cattle were 7% dearer on average.
Nevertheless, IFA National Livestock chairman Henry Burns recently said there is real anger and frustration building among cattle farmers because a much needed late year beef price lift by beef processors never materialised.
He said processors have sent a very negative signal to beef finishers and to suckler and dairy beef breeders.
He said some big processors used the Quality Payment System in a very negative way, and are now turning their back on farmers who they encouraged to keep bull calves from the dairy herd, for fattening.
Many farmers seem deeply disillusioned, despite soaring beef prices worldwide. Export markets are promising in the short to medium term, but it remains to be seen how hard will work at reversing the 7.5% reduction in the first nine months of 2013 in the suckler calf numbers which the quality beef industry depends on.
This reduction is linked mainly to the 2012-13 fodder crisis. But it could be the start of a longer term trend which will leave Ireland poorly placed to take advantage of worldwide beef shortages.
Still recovering from the fodder crisis, farmers are also nervous about 2015. Then, the reformed CAP could bring a financial shock for many Irish cattle farmers, even as new horizons open up for all farmers with the ending of EU milk quotas.
Although Teagasc experts expect cattle rearing incomes to recover in 2014, 2015 could bring major new troubles, in the shape of single farm payment cuts of up to 30% for some large scale drystock farmers with high entitlements per hectare.
It’s a nervous time for cattle farmers not helped by this year’s livestock price trends.
The beef industry needs to act to avoid a scenario of Ireland’s quality beef sector missing out on an opportunity to supply what is fast becoming a luxury food market.
The rush by retailers and food processors to source quality beef following the horsemeat scandal hit an already tight beef market.
Meanwhile, changing diets in emerging economies such as rising incomes in China have also kept beef prices high.
Chinese imports are predicted to jump almost 19% next year, while African and Middle Eastern markets are also expected to be strong in the marketplace.
With the supply from farms globally hit by droughts, higher feed costs and lower farmer profitability, there are record high prices in the overheated beef markets of many countries.
Many beef producing countries are poorly placed to take advantage. Next door in the UK, cattle numbers are the lowest in 80 years.
The cattle herd is at a 60-year low in the US, the world’s largest producer and consumer of beef, resulting in record high prices.
Rebuilding of cattle herds will limit beef availability even further in the short term.
It should all be good news for Ireland, the largest net exporter of beef in the northern hemisphere.
Unfortunately, the fodder crisis has reduced our raw material, cattle farming remains an unrewarding business, and few are in the mood to expand ahead of what shocks 2015 may hold.
