The farmer representative organisations went head to head with the meat industry this week but the issues at stake are nothing new. Although they have been highlighted by the Beef Plan factory protests in the past two weeks, they have been on the agenda of discussions between farmer representatives and the industry for years.

Specifications

Age specifications of 30 months for steers and 16 months for young bulls is a major grievance for farmers, yet the reality of the marketplace is that the highest paying customers for Irish prime beef demand this age limit. It is also a requirement for many export markets outside the EU, although Japan dropped this requirement earlier this year.

The 16-month limit tends to be a supermarket-imposed specification, their logic being that as young bulls go beyond this age, the risk of their eating quality deteriorating increases.

Carcase weights are also an issue for farmers but again the driver is supermarkets buying retail packs of beef. The issue here is producing steaks to fit a retail pack and meet a price point, and where a steak fails to qualify for the supermarket, it will be sold at a lower price in a wholesale or catering market.

Movements

The issue of a maximum of four movements – or to be more accurate four farm residencies – is also driven by demands from the higher value customers, namely supermarkets and burger chains.

McDonald’s, which buys 40,000t of Irish beef each year, has had this policy since the 1990s and it is unlikely to change any time soon. From a farmer perspective, while this is a constraint in selling, over 90% of cattle presented for slaughter have four movements or less.

Also, many of these customers will not accept cattle directly from a livestock market, demanding a period of at least 70 days on the last farm prior to slaughter. While this reduces farmers’ options of using the mart for finished cattle, the reality is that if they go through a mart prior to slaughter, they will not be eligible for the most demanding but highest paying customers.

No matter how these particular issues frustrate farmers, the reality is that they are the specification required to sell beef in the highest value but most demanding markets. This means that cattle meeting these will be worth more to a factory than those that don’t and it is reasonable that the farmers supplying in-spec cattle should be paid accordingly.

Trim and grading

EU legislation stipulates that where mechanical grading (VIA) is used, the grade it gives cannot be overruled. However, it is a reality that VIA machines occasionally deliver what most people would consider is an incorrect grade.

While the grade cannot be changed, if it is challenged by the farmer or his/her agent, factories can choose to pay more than the official grade suggests.

The issue of trim monitoring has been controversial for years and a breakthrough was achieved at the start of this year with the introduction of in-factory monitoring by factory staff in addition to the established inspection process.

However, while weighing prior to slaughter may provide useful management information for a farmer presenting cattle, it will do nothing to determine if the animal is trimmed properly.

A much better option would be the introduction of high-specification cameras that can capture precisely the level of trim on carcases as they go through the weighing and grading process.

If we can inspect crops in fields from space, we should be able to capture images of sufficient quality to determine if cattle are trimmed excessively.

The grid and QPS/QA payment

The cattle pricing grid has been in place for 10 years and that in itself should mean it is time for a review. Michael Drennan, who as actively involved in creating the grid, wrote in the Irish Farmers Journal over three years ago that with the upward movement of beef prices, the gaps between grades should be adjusted for mathematical reasons alone. There can also be a debate about paying more for better quality beef-bred cattle but the reality is than anything gained by one grade on the grid will be taken from another.

On the issue of not paying a QA bonus for QA cattle if they don’t meet the QPS standard, farmers have a valid point as no matter how plain an animal is, if it meets the other specification requirements and is quality assured, it will be suitable for high-quality mince for supermarkets or the burger chains.

Transparency and insurance

Nothing would do more to build farmer confidence and understanding of the processing side of the industry than having complete transparency in the wholesale value and stocks of products inside the factory – as is the case in the US.

The final element of the European Commissioner for Agriculture’s unfair trading practices legislation may provide the platform for this but Government should legislate anyway.

The insurance deduction by factories is a relic of history and effectively a farmer contribution to the creating of a fund to cover any unforeseen factory losses on the animal not apparent at the time of slaughter. It is an arbitrary deduction and this insurance is purely at the discretion of the factory and not provided if they have any suspicion that the animal is in any way unfit.

Comment

Specifications are necessary when targeting the highest value markets and any payment structure should properly value the yield of beef and the markets in which it can be sold. What has happened is that factories seem to switch specification policy from strict application when there are plenty of cattle to not enforcing specification when cattle are scarce, sending mixed messages to farmers in the process. The talks should sort this out once and for all with a lead-in time for farmers to get in a position to produce what the market wants most.