While the news on €50m of EU money has grabbed the most attention over the last week, Commissioner for Agriculture Phil Hogan has launched a consultation on factory transparency that may be even more important in the longer term.

This will run for four weeks and then be adopted by the EU Commission, taking effect six months after adoption.

Member states will be responsible for collection of the data and forwarding to the Commission for publication through its agri food data portal and market observatories.

Cattle price reporting

The model for this process is already in place, where data on animals processed is collected by member states on a weekly basis and forwarded to the Commission by Tuesday the following week and published by Wednesday afternoon.

That is how the Irish Farmers Journal publishes individual factory prices that are paid each week.

That is the last information known on the value of beef until it emerges from the factory, put on the butchers or supermarket shelf and in catering outlets.

This gap in the information chain is a huge part of the problem with farmers' lack of confidence in factories.

EU Agriculture Commissioner Phil Hogan has launched a consultation on price transparency in factories

As the recent Irish Farmers Journal Beef Summit demonstrated, the relationship between farmers and factories is particularly hostile and this is driven by farmer belief that they are being treated unfairly, with factories profiteering at their farmer supplier’s expense.

Published accounts

The absence of published accounts by the privately owned factories means that there is absolutely no knowledge on how profitable factories are.

Ironically, if this information was published, it would likely show that while profits were counted in millions, when this is broken down into a profit per head of stock processed, it would be quite low.

The millions are created by a huge volume of throughput over a short period.

Farmers keep a beef animal for anything between 14 and 36 months, sometimes longer, whereas a factory will usually have most of the beef cleared from it between 14 and 36 days.

US model

Bringing transparency between the lairage and retail shelf is not unique in the beef industry, even if it hasn’t been in place in Ireland or elsewhere in the EU.

In the USA, factories are obliged to report daily wholesale prices and value of stocks of the full range of beef cuts taken from the carcase.

This level of transparency means that everyone can see whether or not particular parts of the animal are in exceptionally high demand or not selling at all, with stocks building up.

Publication of information on values and volume of product in factories won't in itself add any value to the price of beef.

What it would help to do is to increase farmer confidence about the price they are being paid by the factory being a fair reflection of the beef market.

It is now important that factories are required to provide a level of detail on stocks and sales value that makes the exercise meaningful and provides true market understanding across the supply chain.

While not referred to in the EU proposals, it would further help build farmer confidence in factories if they were obliged to publish annual accounts.