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The falling beef price, as reported by Adam Woods in this week's Irish Farmers Journal, is a further blow to the specialised beef production sector following the Teagasc income revelations revealed last week.
The fact that suckler farmers are living with incomes that are, on average, 10% of dairy farmers means that there is little attraction in this type of farming.
Admittedly, 2022 was an exceptional year for dairy prices, but it was also considered a good year for beef prices, with the price frequently above €5/kg, when in previous years it had struggled to beat €4/kg.
Even with this, the rising costs of production swallowed the extra farmgate price and suckler farmers were left with crumbs, as were sheep producers and beef finishers were little better off.
Direction of travel
Mainstream suckler beef production in Ireland has always relied heavily on subsidy for commercial viability.
The latest round of convergence means that intensive cattle rearing on relatively small though productive farms has become a loss-making exercise with the reduction of CAP payments.
This is in keeping with wider EU policy to have extensive beef and sheep production, as is the huge funding that is being allocated to encourage organic farming and environmental schemes.
All of these reduce production capacity and with market prices not being enough to encourage production, then decline is inevitable. The only issue remaining is what pace the decline will happen at.
Rewetting
When the full effects of rewetting and other environmental schemes plus increased conversion to organic farming, the pace of decline in the suckler herd is likely to increase.
The factories are planning for this type of future. We have noted that ABP has secured another processing unit in central Scotland, another country where the cattle herd is in decline, despite farmgate prices for beef typically 20% or up to €1/kg higher than the equivalent beef carcase in Ireland.
Meat Industry Ireland chair Philip Carroll indicated to the Irish Farmers Journal in an interview at the end of last year that losing 200,000 cows would mean a 20% drop in beef output, €700m loss in exports and the loss of at least five factories and 6,500 jobs directly and indirectly.
Whatever the loss in cattle numbers - and loss is inevitable with or without the dairy cull scheme - there will be a knock-on effect in the rural economy.
Need for impact assessment
Irish livestock-based agriculture is facing a once-in-a-lifetime transformation as we adjust to the EU demands in Farm to Fork and national legislation that demands a 25% cut in emissions from agriculture by 2030.
We have a myriad of announcements on funding for different sectors of Irish agriculture, all of which are useful, in that they add some revenue to producers, but none are at a sufficient level to really drive policy, with the exception of support for organic conversion.
It is now two years since the Irish Farmers Journal commissioned KPMG to work on an impact assessment of Irish agriculture delivering emissions reductions at various levels.
Meat Industry Ireland made some basic calculations on what losing 200,000 cows would mean at meat processing level, but, beyond this, there hasn’t been a comprehensive study undertaken on what the major policy changes currently under way will mean for Irish farmers and the wider rural community that are engaged in downstream processing.
Surely a comprehensive impact assessment is a step that should already have been taken, but better start the process late than not do it at all.
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