Beef farmers respond to changes

By Matt Dempsey

The beef sector is being turned round. On Tuesday night we had the awards for the best beef and sheep producers in the country. These only happen every two years but the changes since 2004 have been dramatic. Across the range of 28 farmers all were now fully retaining their Single Farm Payment to meet the ongoing expansion needs of their business.

All the farms had moved into a net profit from production for the market - the average net profit figure after all costs - fixed and variable was €219/ha - compared with a loss of €221 two years ago.

€220/ha is less than €100 an acre or about 70 old pounds. It's clearly no fortune and the Single Farm Payment continues as an absolute critical underpinning to family farm stability. We should not be surprised at this low level of profit - welcome though it is - beef prices are at approximately £1.03 (pounds) precisely the same as 23 years ago. Costs have escalated across the board in the meantime.

But nevertheless the turnaround in a two year period is highly significant - participants in the awards have shown a capacity to both increase output and reduce costs and this has applied across the range of producers from specialist sucklers producing weanlings for sale to the straight calf to beef producer to the specialist finisher.

Some of the improvement is undoubtedly due to the lower shipments of Brazilian beef on the EU market but Bord Bia chief Executive Aidan Cotter had the up to date figures showing that total supplies from Brazil only fell by 4" due to the Foot and Mouth restrictions. So while Brazil Foot and Mouth has been a factor it has not been crucial. The other driver has been productivity improvements - better breeding, improved weight for age and reduced costs.

Part of the reduced costs have come from a realisation that the price of grain direct from the combine is low compared with anything but good crops of first cut silage. With grain coupled with straw and cheap balancing concentrates - weight gains can be sustained.

Side by side with this the impact of maize and the enhanced growth rate of bulls versus steers is driving extra cost effective output at farm level. The strong demand for good continental weanlings and the increased emphasis on water tight quality assurance is also seeing extra premiums being generated.

All this is highly positive. But these were the cream of the country's drystock farmers.

The Teagasc beef monitor approach is proving its worth but it needs intensive advisory service back up. A service which is difficult to deliver given the understandable short term emphasis on the various schemes. We don't have long to build up our technical beef capacity. WTO is a real and constant threat with fresh efforts being made to re-start the misguided process. But we are seeing real progress in terms of EU market penetration and production efficiency.

We must build on that foundation.