BETTER Farm: BEAM payment covering 2018 losses

The €100m Beef Exceptional Aid Measure (BEAM) was announced earlier this summer and is open for application until 8 September. Branded as a tool to provide financial aid to Irish beef farmers, the scheme offers a payment of €100 per finished animal, up to a maximum of 100 animals, and €40 per suckler cow, up to a maximum of 40 cows. The he full details and requirements are outlined below.

Speaking in relation to the scheme, Minister for Agriculture Michael Creed said: “I am keenly aware that the past few months have been very difficult for beef farmers. There has been a prolonged and exceptional period of depressed prices since last autumn, with the ongoing uncertainty surrounding the outcome of Brexit, among other factors, contributing to this market disturbance.”

So just how challenging has the last year been on Irish beef farms and, more importantly, can the BEAM scheme fill the gap?

Analysis

For 2018, Teagasc/Irish Farmers Journal BETTER Farm beef challenge profit monitor results showed that the average net margin on farms was €38/ha (excluding premia). The year before that, the average net margin was €94/ha. So in 2018, net margins on the BETTER farms fell by €56/ha, on average. With the average farm size being 52.6ha, that’s an average net profit drop of €2,946 per farm.

From a national perspective, provisional analysis of suckler-to-beef e-Profit Monitors (203 farms) shows that the average net profit (excluding premia) in 2018 was €25/ha, while the top third of farms achieved a net profit of €380/ha. Compared to 2017 results, these figures are down €120/ha and €113/ha, respectively. With an average farm size of 47.4ha, the average suckler-to-beef net profit was down €5,688 in 2018. On farms within the top third, net profits were down €5,356 per farm.

With these losses in mind, Table 1 shows the potential average BEAM payment by system and across the whole BETTER Farm group. With average suckler numbers sitting at 53 cows and the average number of cattle slaughtered being 46, the average BEAM payment for BETTER Farm participants could potentially be €6,200 per farm. Interestingly, this would more than cover the losses endured in 2018. But unfortunately that’s not the full story.

For a start, farmers will be pleased that BEAM has the potential to cover losses incurred in 2018, but they will be wondering is there going to be BEAM II. Beef prices have been seriously depressed since the start of the year, with little upturn except for a three-week spell in May.

Currently, beef prices are running 40-45c/kg behind this time last year. That’s €150-€190 per finished animal. If BEAM will be used in many cases to cover a large part 2018’s losses, what can fill the gap left by 2019’s beef price pressure?

And then there is the issue of a 5% reduction in livestock organic N production. For a 50-cow suckler herd finishing under-16-month bulls, this means dropping cow numbers by approximately three, or selling heifers earlier. In a 50-cow suckler to 24-month steer system, it means selling steers at 21 months or dropping cow numbers by five. For weanling producers, it will mean dropping cow numbers by two for every 25 cows on the farm.

Considering all farmers within the BETTER Farm programme have set their stalls out to increase output per hectare over the last two years, is BEAM going to be a step in the wrong direction?

System: Suckler to under 16-month bull

Suckler cows (2018): 46

Cattle slaughtered (ref. period): 44

Applying for BEAM? Yes, we will be applying for it. Telling the truth, I think it would be madness not to. 2018 was a difficult year and this BEAM scheme, along with BEEP, would certainly help to make up some of the deficit. Personally, I think it should’ve been paid out in a different form than this but we’re getting it now and that’s what’s important. In terms of the 5% reduction, for us it’ll probably mean dropping four or five cows. Because I’m working off farm I wouldn’t have too much of an issue with this.

System: Weanling seller

Suckler cows (2018): 36

Cattle slaughtered (ref. period): 0

Applying for BEAM? Yes, I will be applying for the scheme – I have to. Like many, we didn’t have a great year in 2018 and we have a lot of bills to pay. At this stage, if I can cover all of my farm bills for the year I will be satisfied. I’m certainly very happy that I have my off-farm job. I suppose the small print is a concern. The 5% reduction would be worrying if it was for a number of years but if I only have to drop two to three cows as a once-off I can manage that.

System: Suckler and calf to steer beef

Suckler cows (2018) 92

Cattle slaughtered (ref. period) 111 (maximum 100)

Applying for BEAM? Yes, we definitely will be applying for the scheme. While we have thankfully made up a lot of the lost extra costs in 2018, there will still be some hidden costs incurred such as forgone sales as a result of high calf mortality. So we are going to need every support we can get. In terms of the 5% reduction, I think we can make it up through greater efficiency. At the moment we are killing some bullocks at 30 months. I think through better breeding, grass management and animal health, we can get all slaughtered at 24 months.

Aid will be paid on adult cattle slaughtered between 24 September 2018 and 12 May 2019, at a rate of €100 per animal subject to a maximum of 100 animals. Aid will be paid on suckler cows that calved in 2018, at a rate of €40 per animal subject to a maximum of 40 sucklers.

Requirements

Each participant must:

Application

BEAM is open for applications from 19 August to 8 September, inclusive. Applications are accepted online only, through AgFood.ie.