BEEF INDUSTRY

Step change in beef sector

On Monday night, Teagasc held an enormous beef meeting in Kilkenny Mart. It coincided with the ministerial announcement made at the same meeting of the new €1,000 a head payment to beef farmers participating in the new discussion group initiative.

So, apart from the high profile meetings, what's actually happening? Is this new confidence in the beef industry down to €4/kg beef or are we seeing a step change in the sector?

We now have the preliminary results from the three-year programme of the Teagasc/Farmers Journal BETTER Beef programme.

The programme, supported by the three main factory groups ABP Ireland, Dawn and Kepak with FBD, has raised the average gross margin of the participating farmers from €340 to €850 per HA.

The Teagasc Derrypatrick herd at Grange has, as Justin McCarthy detailed in our recent suckler supplement, has returned a gross margin of €1,100 and a net margin of almost €600 per HA and this is before any single farm or other support payments are taken into account.

The profit drivers in beef have been slow in evolving on a national scale -- stocking rate, herd health, grass management, identification of the type of sire and dam most suited to meet the target market and the maximum genetic information on the capacity of the individual cows and bulls to deliver.

The wishlist seems routine but, up to now, the sector has not had access to even agreed veterinary advice on herd health or husbandry advice on most suitable cow type.

This is all changing and this is coinciding with genetic progress with ICBF being increasingly in a position to gather, compile and disseminate critical genetic data.

All of this is feeding into a sector which, as we said last week, is increasingly seen as a source of high quality, traceable safe beef for a world where consumption is growing significantly as large swathes of new consumers grow rich enough to afford it.

As the fourth largest net beef exporter in the world and with one of the largest suckler herds in Europe, Ireland is in an extraordinary position to benefit from a real upgrading in our beef production.

At the moment, we are in discussions with Teagasc finalising the details of the new Teagasc/Farmers Journal programme.

The three industry participants and FBD have all committed to a significant increase in their funding and the programme will be in line with the Harvest 2020 proposals be extended to cover every county in the country.

This extended programme, together with the newly introduced and funded discussion groups, as well as a retained and hopefully revamped Suckler Cow Welfare Scheme, all have the potential to radically alter the profitability of Irish beef production.

As the minister rightly said with 100,000 farmers involved in the enterprise, it forms the heartbeat of Irish farming. A heartbeat is not much good without profitability.

Irish beef is now, for the first time, exhibiting some of the characteristics of the beef industry internationally -- a realisation that bulls are much more efficient than steers but that they require a high level of meal during the final finishing stages, and must be produced to the specification that the particular market needs while grass fed steers with little meal but aimed at definitive niche markets have a real place.

The Irish beef sector is at last taking on a more logical structured framework.