The decision to leave the EU could accelerate change within the local beef and sheep sector and increase the focus on producing animals to processor requirements.

Giving his views at a seminar organised by animal feed company, AB Vista, in Armagh at the end of last week, Dr Ryan Law, agriculture research manager with Dunbia, pointed out that processors mainly buy cattle for steak cuts, not for mince, which is often in surplus in the market.

“The consumer doesn’t buy big steaks. On a 400kg carcase, we are often downgrading 30% of the cuts. They are sold at a lower value. You could argue that current penalties on out-of-spec cattle are not enough,” he said.

Post-Brexit, there is potentially an opportunity in the British market given that it is only 75% self-sufficient in beef. However, it is a market driven by sales in retail packs, where the size of a loin of beef matters. “After Brexit, if we end up with limited availability of alternative market outlets in other countries, penalties on out-of-spec cattle are going to increase,” suggested Law.

At the Dunbia factory in Dungannon, the average age of prime cattle at slaughter last year was 28.7 months, something Law maintains is “much too high” and indicative of significant inefficiency in the sector, and a lack of progress with animal genetics. “We are way behind ICBF (in the Republic of Ireland),” he suggested.

He believes it is time for the industry here to re-evaluate production targets, and aim to consistently produce 560kg steers and heifers at a maximum of 15 months, to result in a 300kg to 320kg carcase, ideal for supermarket specs.

To do that might require a change in cattle breeds, with a switch back to more traditional genetics. Like other beef processors, Dunbia has also been working on an integrated supply chain involving dairy-origin beef. With most suckler beef producers highly dependent on direct payments, and these payments under threat post Brexit, Law believes that over the next 15 years, the amount of domestic supply coming from the dairy herd could increase to 70%.

“It is not inferior. It is high-quality beef,” he said.

The other change coming at the industry is around a payment system. “Once we leave the EU, it will quicken the transition away from the EUROP grid to an alternative system,” he maintained. That new system could incorporate measures for eating quality and suitability of the carcase to meet retailer specs.

With significant uncertainty as to how farmers are supported post-Brexit, Law believes that there will still be a role for suckler cows to help manage marginal land.

Beyond that, only efficient beef producers will be able to survive. “Westminster won’t allow food prices to significantly increase. The option is there to introduce more competition by allowing more imports. Production efficiency will be key,” he suggested.

He also doesn’t think rules and regulations will get any less, and there will be an increasing focus on reducing antibiotic usage and on quantifying the carbon footprint of local agriculture.

More fundamentally, is there a fear among processors about the future supply of beef? “That fear is massive,” he acknowledged.

Sheep

While the beef industry faces uncertainty around Brexit, the threat to the sheep sector is potentially even greater, given that the UK is approaching 100% self-sufficiency in lamb, and is heavily reliant on exports at times of surplus.

“The EU market is extremely important for our lamb industry. Our lamb is too expensive for markets in the rest of the world.

‘‘Without a trade deal the sector would be under serious pressure,” said Law.

ABP has written to suppliers to announce changes to its payment grid for English cattle from 31 July. Farmers will now see higher deductions for carcases over 420kg.

Between 420kg and 430kg, the deduction is rising from 4p to 15p; between 430kg and 440kg the cut increases from 8p to 30p; and between 440kg and 450kg farmers will get 45p cut from the base price.

This brings ABP in line with other British factories that are looking to incentivise farmers to meet retailer specification demands.

Some abattoirs have started cutting the price when carcases go over 380kg with nothing paid on weight over 400kg.