The upward move in Irish beef prices this week will be welcomed by farmers. However, it is not the outcome of some brilliant marketing strategy; rather, it is a case of the Irish trade responding to international market trends – as it has always done – despite countless declarations of ambitions to develop premium markets for a premium product.

Irish farmers are producing a premium beef product at great cost. But, unfortunately, the farmgate price they are getting for this is as close to what is paid to farmers in Brazil as to what is being paid to farmers in the premium British market.

The Beef Market Taskforce was wrapped up by Minister for Agriculture Charlie McConalogue this week. The fact that Polish bull beef price is currently higher than what is being paid for Irish steers exposes the extent to which the grouping has failed to deliver meaningful results for farmers.

Talking shop

A new beef/suckler forum has been promised by Minister McConalogue. It cannot be another talking shop. Now is the time to develop a coherent strategy. This has to be viewed through a realistic lens of what can be delivered instead of the idealistic lens that has been used to date.

Up to now, the strategy has been the food version of “build it and they will come”. Farmers have been encouraged to produce year-round steer-based beef to the highest welfare and environmental standards. It was on a promise that this would be used as the platform on which to build Irish beef as a premium global brand.

Farmers have the premium quality platform in place but the premium brand has not appeared. It may happen at some point but until there is evidence, Irish beef producers need to adjust their business model to compete in a global commodity business – in the same way our dairy sector has. It has successfully built a global commodity business parallel to the premium niche filled by Kerrygold. If the opportunity arises, the beef sector can adjust to developing a Kerrygold but, in the meantime, it needs to focus on producing a product that can compete within a commodity market.

That means focusing on grass to produce beef as opposed to a year-round system dependent on finishing inefficient steer beef over winter months.

Making the most of grass

Steer beef has to be low-cost and that means grazed grass with intensive finishing confined to high-performing bull beef. That is the most efficient food convertor in the absence of growth promoters for steers, which are available outside the EU.

In passing, it is worth noting the irony that it is US grain-fed steer beef that is considered the premium beef product in Asian markets with the grass-fed South American offering considered the commodity product.

Young bull beef works satisfactorily in our EU markets and is presently worth more in France than the relatively small amount of steer beef that they produce. Irish beef isn’t in a position to dictate price in any market and therefore has to shape its product offering to best match what commodity markets are prepared to pay.

Brexit funding for farmers

Meanwhile, aside from market value, Irish farmers have not yet prepared for the longer-term consequences of Brexit and have yet to make any pitch for access to the €1bn Brexit Adjustment Reserve (BAR) fund. The factories have been quicker off the mark with the first tranche of the €100m fund announced recently. This has been secured by the factories in a year of huge factory profits, according to the accounts published by the large global players. Unfortunately, no such information is available in Ireland but it is reasonable to assume they have a similar performance.

Irish farmers need to be pitching to the BAR to assist them adjust their production model to deliver what market prices are signalling is required. With our farmgate prices behind global players, we are in the early stages of competing in a global market and this will only increase as UK trade deals with New Zealand and Australia come into effect.

Making Irish beef a premium product has been a worthy aspiration but it has never moved beyond aspiration to reality. There is no doubt CAP supports allowed the sector continue on this journey without any recognition in the marketplace.

But with the reorientation of payments away from the sector, it cannot continue. It is therefore time to deal with this reality and focus on developing a beef production model that is aligned to the commodity prices farmers are receiving.