Increasing live cattle exports is still seen by farmers as the primary way to boost Ireland’s beef sector.
In the 2017 Irish Examiner ICMSA farming poll, just under half (48%) of the 569 respondents ranked increasing live exports as the most important solution, compared to 59% in 2015 (when this question was last asked in the poll).
Farmers’ wishes have been fulfilled, insofar as live cattle exports increased nearly 50% this year, across all cattle types, so the fall in interest in live exports from year to year is predictable.
But it’s clear from the poll result that farmers would warmly welcome further increases in live exports, in order to reduce the number of cattle going for slaughter here in Ireland, a market trend which farmers would expect to boost the prices they are paid for cattle.
Those taking part in the poll were asked to rank the most important changes that might improve the prospects of Irish beef farmers (see detailed results in accompanying graphic).
With most of the country’s farms having a stake big or small in the beef industry, the poll has important messages from farmers for all in the beef industry, one of the main agri-food export sectors, at €2.262 billion per year.
Beef processor mergers are seen as a major issue by farmers, with over one third of respondents (34%) seeing an end to beef processor mergers as the second most important solution for the beef sector, and 16% ranked this as the most important solution,
This poll result indicates that farmers have clearly been spooked by the ABP Group’s acquisition of Slaney Foods last year, which leaves the group controlling over 25% of all cattle slaughtering nationwide. Farmers were strongly opposed to the merger at the time, with IFA saying it gave ABP and Slaney combined control over 36% of the premium cattle trade nationally, and 44% of the premium cattle trade in the South Leinster region.
As a result of the merger, ABP is estimated to have a hand in 40% of the national sheep kill and 50% of the State’s rendering capacity.
Earlier this year, Dawn Meats announced that it was acquiring a majority stake in meat group Dunbia’s operations in the Republic of Ireland.
Ireland’s Competition and Consumer Protection Authority (CCPC) was notified, and has yet to make a decision on this proposed acquisition.
Already one of Europe’s leading privately owned agribusinesses, ABP Food Group continues on the acquisition trail, bidding now to increase its stake in the UK-based Linden Foods meat processing business from 12.3% to 50%.
It also moved recently to take over sole control of Good Herdsmen Ltd, which operates a processing plant in Cahir, Co Tipperary, and sells organic beef products to grocery retailers and industrial processors.
“Farmers struggle on a daily basis to get a fair price for their cattle from factories, this is just going to weaken their position even further,” commented Irish Cattle and Sheep Farmers’ Association beef chairman Edmond Phelan recently on consolidation of the beef trade in the hands of the “big three” (Dawn Meats, Kepak and ABP).
“It proves once again that the only hope for the beef sector in this country is competition between live exports and factories,” said Mr Phelan, and the result of the Irish Examiner ICMSA farming poll indicates farmers agree with him.
Thirty-four per cent of those surveyed see paying the quality assurance bonus for all cattle from qualifying farms as the most important or second most important solution to boost the beef sector.
It’s not surprising that quality assurance payments are ranked in the top three.
They have long been a contentious issue among farmers, because cattle coming from a quality assured farm do not always receive a quality assurance payment.
Processors enforce various criteria such as age, number of movements, days of residency on the farm, grade and weight, to determine if they have to pay over the 12c per kg quality assurance payment to farmers.
Farmers in this poll were not asked in previous years to rate the beef quality assurance system, so no year-to-year comparison is available.
Those surveyed put improving the technical expertise of beef farmers, and abolishing or completely overhauling the QPS (Quality Payments System) beef grid as the fourth and fifth most important of the five options presented.
While it is positive that many farmers still see technical improvements as a way of improving the beef sector, with 24% ranking it first or second in order of importance, in 2015, farmers viewed improved technical efficiency as more important, with 37% ranking it first or second most important.
This year, only 22% rate abolishing or completely overhauling the QPS in the top two solutions to boost the beef sector, compared to 35% in 2015.
It’s somewhat surprising that farmer’s interest in seeing the grid abolished or overhauled is declining.
But this may be a sign that farmers feel it will not happen, and is only wishful thinking, despite the organisations constantly raising the issue.
The ICMSA has been critical of the QPS grid from its inception, issuing a recent press statement saying: “The QPS has a design bias in favour of the beef factories, and has been over-complicated in a way that we felt was deliberately done to confuse even the most experienced farmers, and throw them off when it came to calculating what their animals killed out at.
“We said that the first day the grid was unveiled, and nothing has happened since that would change our opinion.”
ICSA president Patrick Kent recently said it is time to move into the 21st century and prepare to replace the grid system with payment on meat yield.
“The grading machines at meat plants are now outdated, as has been highlighted by Dr Paul Allen at the recent ICOMST conference in Cork,” said Mr Kent.
“Payment on meat yield is the single most important strategy that could re-invigorate the struggling suckler sector.”
It’s clear that while farmers might not see an overhaul of the QPS Grid as a key solution for the beef industry, at least two farm organisations do, and we are likely to hear more on the subject in the weeks and months ahead.