The fifth beef forum last week was arguably the most productive to date. The meeting of farmers’ organisations, factories and other bodies, chaired by Agriculture Minister Simon Coveney, agreed a 23-point document which, it had been hoped, would result in a calming of tensions.

Here we examine each of the proposals and their real meaning, if any, for farmers. Many of them are self-explanatory while others are complex with only aspirational and potential outcomes.

Price transparency

“The Department of Agriculture will continue to publish its Beef Pricewatch app and keep the format and content under review, with a view to maximising price transparency for farmers.”

What it means: The Department launched the Pricewatch app in October in an attempt to provide farmers with real-time factory prices.

“The current statutory price reporting system based on the R3 steer is the accepted system for cattle price comparisons across the EU.”

What it means: Not a critical outcome, but it will be seen as a win for the IFA. The IFA and processors had been at odds over price comparison of cattle. IFA had consistently used the R3 steer as the grade for which to compare Irish cattle prices with those in Britain, while the factories said focusing on just the R3 grade was too narrow.

“Meat Industry Ireland (MII) will work with Bord Bia, other agencies and farm organisations to develop a market index, based on the different beef categories on the main markets and channels served by Irish product, with a view to developing a clear understanding of the market place.”

What it means: This could prove a significant development, if an index can be designed that reflects how the market is trending, and gains the trust of farmers. Likely to look at wholesale and retail beef prices.

“MII will work with its members to develop a harmonised remittance docket for farmers showing base price, bonuses and any factors contributing to the final price paid in a clear and transparent manner within three months.”

What it means: Often unclear, factories have committed to making the dockets easier to navigate and understand, showing base price, bonuses, cuts, etc.

“Individual meat processors will proactively communicate price signals and market requirements to suppliers as early and as transparently as possible.”

What it means: Factories will have to alert farmers to shifts and changes in market demand sooner. When specs were altered in 2014, processors attributed blame to the market, saying they were responding to what their customers were requesting. However, farmers had already committed to a production system based on previous expectations created by processors.

Weight specifications

“Processors will agree not to impose any price penalties on any animals based on weight up to 31 December 2015. Farmers presenting heavier stock should provide adequate notice to processing plants.”

What it means: There is now essentially an amnesty on farmers producing heavier animals for all of 2015 as they will not be penalised. On the processor side, they have expressed concern that producing heavier animals with no weight limits goes against the move towards sustainability. Where it says a farmer must contact their factory before presenting a heavy animal cannot be overlooked. Though processors have agreed to take heavier animals next year, they could decline the animals, for instance due to “current market conditions”.

“In the meantime, Teagasc, ICBF and Bord Bia will examine the implications of weight specifications for the profitable production of grass-fed beef, particularly for the suckler herd, having regard to market requirements and economic returns for farmers.”

What it means: A targeted research project addressing the impact of future carcase weight restrictions will clarify the best options for cattle producers.

Age specifications

“Processors and Bord Bia will engage with customers and the Department of Agriculture will engage as soon as possible with competent authorities in third country markets, with a view to increasing the age specification for premium beef from 30 to 36 months, and report back to the next forum on progress.”

What it means: On the face of it, quite a lot. However, when you look closer it might not mean as much. The factories have said they will talk to retail clients and people in third country markets to see if they will raise the age limit from 30 to 36 months. This only means they will discuss it with them – it does not mean the age limit has been raised to 36 months. Just over two weeks ago, Agriculture Minister Simon Coveney signed a deal with China on beef with an age limit of 30 months. The likelihood of an increase of age limits to 36 months remains very slim.

“Teagasc, ICBF, Bord Bia, and farm organisations will look at the economics of producing beef sustainably to these age specifications, taking into account factors such as the potential market advantage of grass-fed beef and the implications for the grass-based system of a 30-month finishing age.”

What it means: As with weight restrictions, focused research into producing for the marketplace can only be beneficial. If age limitations are to be a factor, farmers need to be advised of their options, and of best practice.

Farm movements

“The industry and Bord Bia will engage with customers with a view to securing flexibility on the number of movements and length of residency and in this regard to remove any barriers to the movement of cattle through marts pre-slaughter and ensure the full payment of the QPS bonus to qualifying animals. There will be a progress report to the first forum in the New Year.”

What it means: ICOS hold that processors want to deter farmers from the option of bringing factory-fit or nearly-fit cattle to a mart. Again, this is only a commitment to examine the issue.

“Processors will harmonise the system for counting the four farm residencies for the purposes of determining eligibility for the QPS In spec bonus, to be agreed at the forum.”

What it means: This is a firmer commitment to finalise and standardise the residency issue and how it impacts QPS eligibility.

“The Department will make any necessary adjustments to its AIM system for this purpose, consistent with statutory and traceability requirements.”

What it means: The AIM system will be in tune with the agreed processor residency requirements.

Quality Payment System (QPS)

“Processors agree that there will be no dual base pricing for steers and heifers in individual processing plants, by breed, age or weight or Quality Assurance status.”

What it means: This spring, processors quoted different base prices for different breed types, and for cattle overweight and over 30 months, and for QA and non-QA animals. One base price now applies for all.

“The QPS system will be reviewed, with the assistance of Teagasc, with a view, in particular, to providing a more simple and transparent system, before the middle of 2015.”

What it means: As with other areas, the QPS review will require a greater degree of trust between processors and farmer representatives than shown this year. Teagasc’s role as honest broker will be crucial.

“Processors agree to a targeted, cost-neutral price incentive for all steers and heifers from Quality Assured farms with effect from 1 January, based on consideration of an appropriate mechanism to be agreed by then.”

What it means: Contentious and perhaps the most talked about topic from the beef forum. It was agreed at the forum that the 12c/kg in-spec bonus under the QPS will be maintained while delivering a bonus for steers and heifers from QA farms. According to the IFA, figures from the Department show that the new quality assurance payment will favour better quality cattle in the ratio of 2:1 for steers. Of the 93% of steers coming from QA farms, an extra 328,000 steers will receive the new payment. The IFA say for heifers a total of 193,000 additional heifers will get the new payment.

“Immediate engagement under the aegis of the forum will follow to ensure progress in this regard.”

What it means: A significant body of work by the forum stakeholders will be required to deliver a workable outcome.

Contracts

“Individual processors will work closely with their supplier base to increase the use of contracts for suppliers, in particular for winter finishers, to provide greater security for the producers of these animals and assurance to processors in relation to supply.”

What it means: We have heard positive noises around contracts before. It needs to happen to allow finishers to plan their buying and feeding costs. A vital issue, but a long way from a firm commitment for delivery in the short-term.

Live exports

“DAFM will continue to support and facilitate live exports by inspecting and approving vessels presenting for inspection for the purposes of transporting live animals overseas.”

What it means: Farmers have been pushing live exports as way of keeping factories “honest” on the basis that more live exports means less cattle in the country for processing which, in turn, leads to greater competition between factories. However, the Department will not lower strict vessel inspection standards.

“DAFM will continue to work to remove any barriers to the traditional trade for fattening and slaughter with Northern Ireland authorities and UK retailers.”

What it means: This relates to the all-Ireland beef label. The Ministers for Agriculture in Ireland and Northern Ireland have discussed an appropriate label for ROI beef slaughtered in Northern Ireland with British retailers.

Producer organisations

“All participants in the Round Table endorsed the development of producer organisations in the beef sector to rebalance negotiating power along the supply chain and to provide greater supply assurance to processors, conscious of the importance of existing market organisations. Having received written submissions, DAFM will work with stakeholders to develop proposals for their recognition in accordance with the provisions of the common Market Organisation Regulation, having regard to the concerns of stakeholders.”

What it means: Producer Organisations (POs) are the great white hope for some farmers. There is funding for them under the new CAP. Farmers hope a PO will have certain rights of negotiation denied to the farm associations by competition law.

Trim

“The Department will strengthen controls around trim in meat plants in accordance with EU regulations.”

What it means: How carcasses are graded by factories has long raised the ire of farmers. This outcome should mean that there will be greater oversight by the Department of Agriculture vets and that there is uniformity regarding the trim taken from carcases and the grading of same. The Minister may first have to engage with his unions to deliver.

Bull beef

“The forum recognises the importance of the bull beef market, and will examine all issues relating to bull beef production systems and market demands at its next meeting in January 2015. In that context, any agreed changes in specifications or QA pricing incentives will be adopted without undue delay.”

What it means: Bull beef will not be accepted by many farmers without contracts from processors, after the experiences of this year. Immediate implementation of agreed changes is a positive.

Forum

“The forum will continue to operate and to monitor the implementation of this agreement, deal with any issues arising and ensure that it is fully complied with.”