Over the past year, Irish farmers have endured several weather crises and the consequent feed crisis.

However, there is some hope, with a late growing season yielding good supplies of grass that will recover some of the deficit. This brought its own pressures in the marts in recent months, with farmers slower than usual to bid for cattle, and factory cattle have been on a downward spiral for several weeks to the point where the IFA is giving next week’s beef forum a miss.

Downward spiral

Irish prices have been on a downward spiral since they peaked at €4.12c/kg for R3 steers (excluding VAT). In that same week, the same R3 steer was worth the equivalent of €4.28/kg in Britain, 16ckg more than in Ireland. In recent years, Irish prices peak in mid-summer and fall thereafter.

By the middle of September, Irish prices had fallen to an average of just over €3.73/kg for the R3 steer (ex VAT), while the same animal in Britain was worth over €4.23/kg according to Bord Bia figures. This was a huge jump of 15c/kg on the previous week and currency volatility is an issue when comparing with British prices as well as market performance.

In any case, the same animal in Ireland is worth considerably less than in Britain, a massive 50c/kg based on last week’s prices, a trebling of the 16c/kg difference in June. Even if last week’s British price is an outlier, the previous week’s average in Britain was 30c/kg, almost double of the difference in June.

Problem with steers

Notwithstanding the weather and fodder difficulties of the past year, the real ongoing crisis facing Irish beef farmers is one of price for our traditional steer beef product. One of the best-run suckler to beef farms in the country, the Newford Farm, demonstrated recently that producing steers for the factory made no profit.

This is the real crisis facing the Irish beef industry and, while factory representatives will point to how well the Irish overall beef average price performs compared with the rest of the EU, it the steer beef price that is the bread and butter of our industry. The Irish Farmers Journal has consistently highlighted the performance of our factories in selling cull cows – we were just 4c/kg behind Britain last week having been ahead of them at several points during the year.

No factory insight

The gap in steer price with Britain, our largest market and the only part of the EU that produces a comparable steer product, raises questions about how well our steer beef is marketed. We have seen rapid expansion of our big exporting factories, with major acquisitions recently by Dawn and Kepak adding to the ongoing growth of ABP over the past decade and more.

McDonald's buys as much Irish beef as our second-biggest export market.

It takes vast sums of money to deliver this expansion but, as private companies, we have no idea how it is funded, and it is reasonable to assume that it is generated from profits.

Is Irish steer beef really sold for less than its British equivalent to the same markets? If so, why are we not more competitive?

Profit in our processing sector is a good and necessary thing. Similarly, Irish farmers are not best served with a factory at every cross roads. It takes large processors to engage with large retail and food service customers as equals. MacDonald’s is proud of the fact that if it was a country, it would be Ireland’s second most important market.

Transparency needed

Where the shocking gap is in the Irish meat processing industry is knowledge of factory performance. The European Parliament is currently debating unfair trading practices (UTP) legislation but this is unlikely to provide the answer in the short term. Transparency must be provided by the Irish processing industry to see where the profits are generated. Is Irish steer beef really sold for less than its British equivalent to the same markets? If so, why are we not more competitive?

Factories also talk about difficulties with stocks at various times and particular parts of the carcase not selling. If we were in the US, we could see this with our own eyes and the Farmer’s Journal could publish weekly figures on the volume and value of each cut of beef in store.

No doubt, factories experience difficult trading conditions and weak markets from time to time. But without having a clear insight to these, farmers do not have confidence that Irish factories are doing their absolute best for their suppliers. If shining a light on what goes on in the beef industry after the farm gate didn’t in itself improve the market, it would at least improve farmer confidence in our processing industry.