The Kepak/Glanbia Twenty20 beef club is a ‘closed-loop’ programme for dairy calf-to-beef systems, where all inputs are purchased from Glanbia and all animals are slaughtered by Kepak. In return, a price premium is offered to complying farmers. In light of rising dairy cow numbers and greater pressure on calf-to-beef systems, the programme is looked upon as a positive development by many.

Launched at the beginning of April 2019, the club set itself a modest year-one target of securing 6,000 calves into the programme by the end of the first year, but planned a significant step up to 20,000 calves by the end of 2020.

Some of the farmers that expressed interest in year one said they weren’t ready to get into it in 2019, so that’s why the expression of interest was for the two years

Kepak’s head of agribusiness Mick O’Dowd says the initiative garnered strong interest from the beginning: “We had about 400 expression of interest forms completed by farmers,” he says. “We obviously had no influence over the genetics of the calves that were born in 2019, so those expression of interest forms were for 2019 and 2020.”

By the end of 2019, the programme had surpassed its year-one targets and had 6,500 calves logged into its books between 85 farmers in 14 different counties. “Some of the farmers that expressed interest in year one said they weren’t ready to get into it in 2019, so that’s why the expression of interest was for the two years,” he says.

Looking at the options for this year, O’Dowd adds: “We have the 85 farmers from last year taking on similar numbers and we are targeting 170 new farmers to bring it up to a total of 250 farmers by the end of the year.” The programme has also had another 150 expressions of interests this year to-date.

Structure

So far, the make-up of farmers within the programme is about two-thirds dairy farmers finishing their own stock and another third are beef finishers. The beef finishers could be either drystock or suckler farmers, but all were required to take a minimum of 25 calves from a qualifying dairy herd. On the supply-demand balance within the programme, it is fair to say there are more calves available than there are people to finish them.

We have a lot of dairy farmers who want to supply the calf and a lot of beef finishers who want the calf, but they want it that little bit further on

“We have a lot of dairy farmers who want to supply the calf and a lot of beef finishers who want the calf, but they want it that little bit further on,” he says. An oncoming challenge for the programme will be to bridge this gap between dairy farmer and beef finisher.

“In terms of moving towards 50,000 calves, we will either have to bring in a rearer element or seek out more beef finishers who are willing to take the calf at a younger age” O’Dowd says, ading that “it would have gotten a little bit complicated, as we were building the programme to allow more than one move (to include a calf rearer). But yes, I do think that will come in time.”

Genetics

The aforementioned rise in dairy cow numbers has contributed to not only an influx in dairy beef calves, but many would argue a decline in calf quality. “What the expression of interest gave us was the consent to analyse the farmers’ herd profiles. This analysis was done through ICBF, focusing mainly on breeding and genetics,” says O’Dowd.

Currently, the Dairy Beef Index is the key barometer for breeding and genetics within the programme, with traits like carcase weight and calving difficulty featuring highly on the farmers’ reccomendations.

In time, we will be attributing metrics like eating quality and sustainability

“In time, we will be attributing metrics like eating quality and sustainability,” he says. All dairy farmers within the programme were issued a list of sires last April – they could go above and beyond on things like carcase weight and conformation, if they felt they could push out the boundaries on calving difficulty, but a minimum standard was set out.

“At the end of the day, we have built a programme with pricing structures and bonuses and we want as many animals as possible falling into this,” O’Dowd points out.

Premium

Once the contract is signed by the farmer for a certain number of calves, each of those calves is individually logged into the programme.

“When the animal comes into the lairage, we know it’s a club animal,” says O’Dowd, but both Glanbia and Kepak know its existence and location from day one, which allows for some forward planning.

“We share this data with our customers to show them the whole process,” O’Dowd claims.

We all know Irish beef is some of the most traceable beef in the world, so this programme is just building further on that

“There are attributes to this programme that we can attract a premium in the market for. People might say it’s the movements, but the benefit of this closed-loop model is really the ability to monitor the inputs.” He adds: “We all know Irish beef is some of the most traceable beef in the world, so this programme is just building further on that by having one source of inputs to the animal.”

The greatest hurdle, he believes, is supply: “the biggest challenge with securing contracts with any customer is ‘can you give it to me 12 months of the year?’” he says. “So yes, we have a basket of customers that are signed up to this, but we need to get it to the scale that they would need. For now though, they understand that, and they are on that journey with us.

We all would prefer if the market was higher than it is now, but there is such a decline in beef consumption

And how is this premium going to be brought back to farm gate level? “The minimum price of €3.50/kg in the programme was breached there not so long ago, when cattle were at €3.45/kg,” he says. “So in that scenario, farmers would have been getting 30c/kg above the market, before any of the other bonuses.

“You can’t really influence the market any more, only give a premium above it. We all would prefer if the market was higher than it is now, but there is such a decline in beef consumption – the UK last year was back 6%. People were sick of hearing about Brexit and then, while there were possibilities in other markets, the coronavirus has put that back on its heels too.”

A suckler programme?

While the Twenty20 beef club does open the door to suckler beef, I took the opportunity to ask Mick O’Dowd about the prospect of a similar programme solely for suckler-beef farmers:

“You have to realise that this programme is only for a relatively small cohort, and yes, it’s more and more of these collaborations that’s needed for the industry,” he says. “A scheme for a suckler farmer that’s doing similar is probably needed, but it goes back to the point I was making in terms of getting that scale.

“The bottom line is, if we could come up with a programme on the suckler side that ticks all the boxes and enough farmers are interested, then we are open to it.”

Weight limits could also be a stumbling block for such a programme, he adds.

“We are being driven by consumer demands on weight limits and I don’t see it changing. A lot of it is to do with the portion size and the price points that the retailer is putting beef on the shelves to compete with chicken or pork.

“So, in building a specific suckler programme, we would need to be mindful of this, but in some markets it could still be achievable.”

The Twenty20 scheme sets an upper weight limit of 360kg carcase.