The figures presented at the Newford open day last Wednesday serve as a wake-up call for the industry. They show that even when a suckler to steer/heifer beef system is operated to an exceptionally high level of technical efficiency, beef prices fall well short of what is required to deliver a viable return.

Without a Basic Payment, Newford farm is on course to make a loss in 2018 of €10,000 before labour and land rent is included. At the outset, the farm model developed by Teagasc had aspired to generate a net profit equivalent to the average industrial wage of €37,000. While weather has had an impact, it is clear that even when firing on all cylinders, the model will fall well short of achieving this.

A full breakdown of what beef price would be required to generate the average industrial wage, based on current levels of output, was not presented on the day. However, Adam Woods and Darren Carty have calculated that the system would require a beef price of €5/kg to break even.

We should welcome the figures generated from Newford farm and the role the project has played in showing the difficulty of making a profit on even the most efficient of farms. The efficiency of suckler beef has often been challenged but this project has demonstrated that even the best isn’t good enough to generate profit at current market prices.

The Newford experience also raises the question as to why our beef industry is wedded to steers. Across the EU, male animals from the dairy and suckler herds are predominately finished as young bulls between 16 and 18 months. At international level, the only regions finishing steers have either access to growth hormones – that effectively replace the bull effect – or to cheap pasture land.

Even the [best suckler beef system] isn’t good enough to generate profit at current market prices

With access to none of the above, why are the vast majority of male animals slaughtered as steers in Ireland and the UK? There is some justification in the UK, where farmers not only have access to large volumes of food waste such as bread, brewers’ grains, chocolate, etc – all significantly reducing finishing costs – but also they are selling into one of the highest priced beef markets in the world, traditionally 40-50c/kg ahead of the Irish price.

In Ireland, the only real justification is a marketing one, where we are told by beef processors that steer beef is our point of difference in the marketplace. Unfortunately, we have no way of measuring if this is actually the case as we get no line of sight as to what beef processors are actually returning from the market.

Teagasc research has never found any substantial difference in eating quality of properly finished young bulls versus steers. Furthermore, we do not see the term steer beef used on any packaging or promotions – and the majority of urban-based consumers don’t know what a steer is (a quick Google search of “steer beef” confirms this).

The Newford figures have identified that the premium in the market for steer beef is either not adequate to offset the drop in performance associated with castration or that beef processors are unwilling to pass it back to the farmer.

It is at best disingenuous to compare the EU young bull price with the Irish steer price when assessing the price returned by Irish processors. The efficiency gains associated with moving from a suckler-steer beef system to young bull beef system are generally accepted to be equivalent to 40-50c/kg deadweight – largely reflecting increased farm output, improved feed efficiency and improved carcase confirmation and kill-out.

As Adam Woods outlines, if the Newford farm was to switch to an under-16 month bull beef system, the financial dividend would be €15,000 or an extra €130 to €150 per cow. However, the justification from Teagasc for not looking at this route as a means to drive profit was a fear that the bull market would become saturated and prices would collapse. While understandable, such fears are not a reason not to present farmers with the alternatives or even a defined plan as to how the steer system is going to be changed to hit targets.

If extensively produced steer beef is what processors want, then a premium farmgate price of 40-50c/kg over the EU young bull price is needed – or at the very least an Irish steer price that is in line with the UK. A precedent is already in place with Angus and Hereford schemes where a premium is paid that reflects the lower output of beef. Why not do the same for steers?

Irish processors have shown an ability to deliver a premium on Irish cow beef. Why can they not do the same for our prime steer beef?

ASA conference: consumers trust farmers more than industry

US Department of Agriculture under secretary for trade Ted McKinney speaking at last week’s ASA conference.

US Department of Agriculture under secretary for trade Ted McKinney came to last week’s ASA conference with one agenda: to highlight the extent to which the US now sees the EU as the museum of modern agriculture.

In what was a clear shot at EU policy on GM and gene-editing, McKinney highlighted the extent to which the EU is ignoring science that has the potential to develop healthier soils, reduce pesticide use, help tackle climate change and reduce food waste.

The fact that the EU is so heavily reliant on the import of grain and protein that are produced using these technologies reinforces McKinney’s argument. As we report, of the 3.47m tonnes of feed imported into Ireland in 2017, 50% was GM.

An interesting trend identified by a number of speakers at the conference, including Owen Brennan of Devenish Nutrition, was that the consumer trusts farmers ahead of the industry. While logical, it is often a fact that is overlooked and questions why we depend solely on retailers to market our product to the consumers. With new marketing channels available, is there an opportunity to change the model where direct farmer-to-consumer marketing can influence the agenda when deciding on what gets space on the retail shelf?

Tillaige: fodder demand

This week’s Teagasc Crops Seminar outlined a likely ongoing requirement for fodder, especially from the dairy sector. While the circumstances in 2018 were exceptional for fodder and crop production, it is still likely that a proportion of dairy farmers making maximum use of their grazing platforms may be in the market for additional fodder most years.

Contracts can be used for this purpose and it was suggested that these get more attractive where they can be used to help both parties. For example, a contract covering fodder, straw and slurry may be much more attractive. Are farmers willing to organise themselves to avail of these opportunities and solutions?

While maize and wholecrop cereal are the most obvious fodder crops, grass should also be considered. Grass in a tillage rotation provides many downstream benefits for land and it is very flexible for both producer and user.

Environment: ups and downs in climate change debate

A number of interesting points came out of the joint committee debate on climate change.

There appears to be acceptance of science that shows methane from livestock has a different life cycle to that of carbon – lasting in the atmosphere for just 12 years.

Farmers will also react positively to the view of chair of the Climate Change Advisory Council John Fitzgerald that he would see little merit in a methane tax on the national herd. He does, however, highlight the economic divide between milk and suckler beef production – indicating a potential climate benefit from a reduction in the national suckler herd.

Sheep: another difficult year for hill sheep farmers

A farmer selling 300 store lambs could easily see their income reduced by over €3,000 this year. \ Valerie O'Sullivan

It’s been a tough time in hill sheep. Tough weather in spring saw greater levels of mortality with the poor store lamb trade also having a negative impact on farmer income. A farmer selling 300 store lambs could easily see their income reduced by over €3,000 this year. Elsewhere this week, we feature the issues facing this unique enterprise. Low carcase weights and fat cover have been the Achilles heel. Farmers can make improvements inside the farm gate by tweaking breeding and diversifying to increase sale options. But this needs to be complemented by support from the Government that appreciates the service these farmers provide to our countryside.

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