It was easy to read the room at Monday night’s Irish Farmers Journal beef markets event in Abbeyleix. Farmers and beef finishers, some of whom had travelled a considerable distance, came to try to make sense of the increasingly frustrating business that is winter finishing.

You could sense that frustration in the room and see the clear concern on people’s faces for their business and how they will cope with the current losses they are incurring. The debate was heated at times, which was expected in the current climate.

There was also a sense that the current drop in quotes given to Irish finishers has been unjustified, given the direction of travel in our main export markets.

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The fact that neither Meat Industry Ireland or anybody in the processing sector attended the meeting is a sad state of affairs. They all received invitations but declined the opportunity to speak to farmers at the meeting.

In past experience, processors have always been very willing to communicate with farmers on market dynamics and what is either driving or impacting markets.

Monday night’s no-show marks a move away from this, and while factories will be quick to communicate their close relationships with their suppliers to their customers, what happens on the ground is a lot different.

Lack of information

We have been inundated with calls from farmers in recent weeks about the lack of information coming from the industry on the market, with very few able to explain why beef quotes have dropped so much in the last number of weeks.

If there is nothing to hide, why not stand up and explain what’s happening in the market? The non-appearance came in for severe criticism on the night from farmers who feel they have been left high and dry by the processing sector.

One thing that was very evident is that the level of risk that winter finishers are being asked to take on is not acceptable.

A relatively small bull beef finishing business finishing 100 bulls is, according to Teagasc figures, looking at a €50,000 loss this spring. This is based on very simple figures – buying a 400kg bull weanling at €2,500, incurring €1,000/head in costs and then selling the animal for €3,000 this spring thereby incurring a loss of €500/head.

Investing €350,000 to lose €50,000 is obviously unsustainable, and that’s what many winter finishers are staring into at the moment.

To add to this level of risk, you also have the completely uneven playing field of large feedlots working off contracted prices competing with smaller finishers who have absolutely no foresight whatsoever of the price that they will receive when finished animals are sold.

So what needs to change? There has to be some way of sharing the level of risk going forward or winter finishing will be confined to factory-owned cattle and factory-aligned feedlots.

Maybe that’s the model that the processing industry now prefers, but it’s a long way from the family farm model that Ireland and indeed Europe has promoted itself on in terms of messaging to consumers.

Factories have refused point blank to issue contracts to smaller finishers and reserved the higher prices for the mega finishers finishing thousands of animals on an annual basis.

Finishers accept that there will always be risk associated with any business such as buying cattle, but there is potential for a more equitable distribution of that risk.

At the moment, the finisher is taking on 100% of that risk, with the factory hedging all of their risk by dropping quotes when they like. I know of pricing models in the UK where processors and farmers share a price gain on an agreed price and also share a price drop.

Surely something like this has to be looked at and developed into a contract to try and protect smaller family farm finishers.

Without changes, winter finishing cattle will move outside the reach of many family farms.