This is a subscriber-only article
Frustration is growing among farmers on the slow progress being made by the Beef Market Taskforce is addressing farmer concerns around issues over factory specifications. Last week’s virtual meeting gave little insight beyond what was already known as the Grant Thornton-produced report on the beef industry remains a work in progress.
Outsourcing
There has to be a question raised at this stage on the value of bring in an outside organisation that doesn’t have any specific insight when it comes to the meat industry or agriculture. Teagasc understands farming, Bord Bia understands markets and nobody really understands the meat processing industry other than the industry itself. Even the industry trade organisation doesn’t have the full picture beyond a general overview of the basic principles. Different companies have different customer portfolios and will therefore have different priorities when sourcing cattle supply.
The Irish beef and sheep meat processing industry has been good at building demand for the 1.8m cattle and 3m sheep it processes annually. Irish processors supply some of the most demanding customers in the world, customers who are not be shy in telling Irish factories what they want.
Factories have been unable to communicate this back to farmers in a way that is understood, and outsourcing the task to a third party doesn’t so far appear to be progressing the issue.
Farmer confidence
Building farmer confidence in the supply chain can only be done by the factories themselves. A big part of the problem is that lack of knowledge about what happens from the time the animal is dropped off in the factory liarage to when cuts of meat appear on supermarket shelves.
There is little to no knowledge of stock or traded prices at wholesale level, and it is this unknown that contributes greatly to farmers' lack of confidence in the supply chain.
Dairy example
Contrast this with the dairy industry. Both here in Ireland and globally, major corporations see their accounts are published annually. These reveal levels of profit being generated and prices for the major dairy commodities are in circulation and available to anyone that wants to be informed.
No such information is available about the beef and sheep meat processing sector, and it is difficult to see how confidence can be built among farmers without access to similar type of information about their beef factory.
Factory trading practices have been explored at EU level and were a particular interest for previous Agriculture Commissioner Phil Hogan. He brought forward unfair trading practices legislation in 2018, and while this addressed issue like payments and fulfilment of contracts, it doesn’t go fully into the dark unknown of what happens between the factory gate and supermarket shelf.
Suggestion
Dealing with farmer confidence in the meat processing industry will require a two-pronged approach. Firstly factories have to walk farmer suppliers through the supply chain and create opportunities to engage with customers. This would increase understanding of why a carcase has to be a particular size so that the cuts of beef fit into a retail pack. Animal welfare has already come a long way, but remains a sensitive issue, particularly with consumers that have little understanding about the practicalities of farming. Again it helps if farmers can hear this at first hand as opposed to from a factory direction.
Legislation
The second way to deal with these issues is through legislation. Government should explore the extent to which it can legislate on bringing transparency to the profitability of the meat processing industry. Publication of audited accounts would be a start, but we should go further and adopt the US model where stocks and wholesale values are published on a regular basis. This in itself doesn’t create more money for farmers, but it creates understanding and is a base on which to build confidence among suppliers.
Building confidence in meat processing should be a new year resolution for the industry in 2021.
SHARING OPTIONS: