Burns beefs it up

on .

Beef price. Classification grid. Genomic scheme. Suckler support. These are just a few of the topics covered in a wide-ranging interview by Matt O'Keeffe with the Irish Farmers' Association Livestock Committee chairman, Henry Burns

Cattle farming is such a diverse sector that it is difficult to know where to begin or end a conversation on the topic. The vested interests on the production side alone include suckler farmers, weanling and store producers, and finishers, all hoping to make a living from their particular enterprise.
As ever, the hottest item on the agenda is price. Since the stand-off between beef farmers and the beef processors last autumn (and long before), there has been a suspicion that beef finishers are not being fairly remunerated for their stock.
Irish Farmers' Association (IFA) Livestock Committee chairman, Henry Burns, highlights the scenario: "There seemed to be an effort on the part of factories, during April, to freeze prices at current levels. They were giving the appearance of not being anxious to buy stock. Up until April, the weekly kill was on a par with last year, but the expectation is that there will be between 120,000 and 150,000 fewer cattle available for slaughter during 2015. That should drive prices for many of the remaining 'shed' cattle up towards €4.50/kg including the various bonuses."
If that's 'talking prices up' by the IFA chairman then, no doubt, the reverse 'talking down' will be done by the processors.

Gridlock
Despite mutterings in some quarters around the Beef Classification Scheme grid, there is little evidence that it will be fundamentally altered. Henry agrees that the original concept of a classification scheme that would transparently reward quality was the underlying rationale for its introduction. "The scientific basis for putting value on the various grades and fat scores still holds true. What has changed is that the price of beef, generally, has improved. There may be a case for increasing the price gaps between grades but, generally, beef producers are used to the concept of selling beef on quality and will produce cattle to meet the grading requirements. Quality bonuses such as the 12 cent/kg quality pricing scheme (QPS) are separate to the grid and that can confuse the issue."

The breeding conundrum
One beef geneticist has suggested that current Irish beef breeding strategies are not fit for purpose. Henry takes issue with this. "There is a natural contradiction in beef breeding. On the terminal side, great progress has been made with the Irish Cattle Breeding Federation (ICBF) bull index delivering the quality required. On the maternal side, there is work to be done to improve the dams. The problem is that a bull that will breed top-quality beef does not necessarily deliver females suitable for breeding purposes.
"The ultimate answer may be to stream herds to prioritise one or the other. Alternatively, it could be left up to the dairy herd to breed suitable females for the suckler herd." Ireland has the lowest average carcass weight in Europe, Henry points out. "The reality is that a range of carcass weights and conformations are required to service the different demands of our markets. The main aim has to be for animals to have high growth and efficient feed conversion rates."

International trends
While acknowledging that the opening-up of the US and Chinese beef markets is a positive development, Henry points out that there are several key issues to be resolved before the benefits of these markets can be maximised. "It will be a while before serious tonnages are exported to either country. The main positive right now is the acceptance that our production and processing standards are of a very high standard. There is work to be done on getting manufacturing beef into those markets. That would drive up tonnage, and Bord Bia and the Department are actively engaged in clearing any barriers to getting manufacturing beef into the US and China."
Commenting on the Transatlantic Trade and Investment Partnership (TTIP) talks, the IFA chairman notes that there is a general enthusiasm for completing a deal, especially among the European negotiators. Under current proposals, he warns, Irish beef farmers would be the big losers in any potential deal. "That makes the Irish economy a big loser, because of the fact that Ireland is the largest beef exporter in the northern hemisphere. We sell most of our beef into the UK and the rest of Europe. So, beef imports from the US would potentially displace Irish beef on Europe's supermarket shelves. That beef is not subject to the same traceability regulations and production constraints as Irish and European beef.
"The proposition that US cattle for the European market would be produced without hormones and tagged for traceability is neither controllable nor provable. European negotiators need to consider these things. We comply with all regulations, making our beef a higher-cost product. All imports must be of the same standard."

New genomic scheme
With Commission approval now secured, the way is clear for the introduction of a new beef genomics and beef breeding scheme. Minister for Agriculture, Food and the Marine, Simon Coveney, says the payments will be €100/cow for the first 10 cows and €80/cow for the remainder of each herd. The scheme needs to be straightforward for farmers to comply with it, Henry emphasises, but he is positive about the scheme: "The genomics initiative can bring benefits provided it is cost-effective and doesn't cost the producer almost as much as the payment is worth. A simple coupled scheme paid for from a 3 per cent reduction in the Common Agricultural Policy (CAP) pillar 1 fund would have been a practical alternative. That's the decision most of the other countries with large suckler herds took. France's suckler farmers draw down €200 per cow under a coupled payment. Nevertheless, we welcome the current scheme."

Income outlook
The economic reality for all Irish farmers, including cattle farmers, is that they will suffer a 20 per cent reduction in the Basic Payment Scheme (formerly Single Farm Payment) over the next five years. "While the new GLAS will potentially deliver up to €5,000, that's also lower than the payments available under the previous REPS," says Henry. In many cases, suckler farming is not a full-time occupation, especially across the western areas of the country.
Bad weather, the loss of the Suckler Welfare Scheme and poor prices in 2013 resulted in the loss of 100,000 suckler cows from the national herd. Henry sums up the current situation: "That shows the vulnerability of the sector and the absolute need to ensure that there is a decent return through a combination of price and supports. All of the quality beef cannot come from the dairy herd. A small amount of funding to the suckler sector can help stabilise it. As Alan Renwick showed in his economic study of the sector, every euro put into supporting suckler farming gives a fourfold return to the rural economy."