A producer group is sometimes considered as a method to use larger numbers to exert pressure on a factory or input supplier in order to secure a better price.
However, price pressure groups alone rarely stand the test of time. A functioning producer group requires farmer buy-in, commitment and loyalty.
Without a committed core group of farmers, producer groups often struggle to maintain momentum. It is farmers who drive standards and help create healthy competition, which ensures a group’s long-term success.
Members of the Mayo Blackface producer group.
The Mayo Blackface producer group is one such group and it has its roots in a breeding sale started in 2004. Originally, 40 members came together to organise a large annual sale of ewes. However, the question remained as to what could be done about the poor returns from ram lambs.
Having tried various avenues, the group made an agreement to begin supplying Kildare Chilling in 2012 with lambs averaging in the region of 14kg. Over time, the relationship has evolved and last year the group of 350 farmers supplied over 25,000 lambs at weights averaging 17kg to 21kg.
For the farmers involved, the benefits are more than just a price premium.
With the distance of travel to factories and many of the farmers having off-farm employment, transport organised by the group is a major time saver.
“We can all remember years ago going to factories and it was the whole day. You’d leave at 4 o’clock in the morning and you could be there till 4 o’clock in the day waiting for your lambs to be killed,” said Simon Walsh, one of the farmers involved in the group.
The fact that the slaughter of lambs for small and large farmers alike is now guaranteed is also a major plus.
Lambs are gathered in a central area from where a trusted haulier transports them to Kildare. Each member is allocated a quota of lambs and given a day on which their lambs will be sold by a central office.
Pat Chambers, who is the group’s liaison with Kildare Chilling, said the importance of having two staff members co-ordinating the group could not be understated.
Communication is an important facet. Members in the group regularly receive text updates with information that can range from the weekly quote to issues surrounding clean livestock.
John Noonan, a Teagasc adviser based in Westport who works closely with the group, emphasised the positive effect producer groups can have on farm performance.
He said receiving continual feedback from the factory and committee members on factors such as kill-out percentage, slaughter weight and fat cover brought steady improvements. Unlike price, these factors are controllable inside the farm gate and can make a big impact on enterprise returns and profitability.
Michael Conway, another farmer in the group, said there had been unbelievable improvement in the quality of the lambs. The majority of the lambs sold by the group grade as Rs or higher and over the last four years the average carcase weight has increased by 2kg.
“It all comes down to management really. People now know the weight of the lamb that is required and so they finish the lamb to get him to that weight bracket and specificiation,” Michael said.
The drought conditions that affected much of the country last year reduced the activity of many store buyers. This meant more farmers in the western region made the decision to fatten and kill their own lambs.
The group believes the returns made on the back of this will see more farmers choose to fatten their own lambs again this year.
In 2019, the group will focus on addressing the high cost of concentrates in finishing lambs and the possible alternative crops available to reduce them.
Five qualities of a successful producer groupMembers are loyal and committed, with all stock sold through the group at the price negotiated by group representatives.Adherance to group rules, which vary widely from requirements on clean livestock to the number of lambs permitted in each load.The product sold by the group is in demand by the market. For Blackface rams, this has meant increasing the carcase weight and grade.Strive to continually improve product and are driven by the competition among group members.A good working relationship with outside partners. For example, the Mayo Blackface group and Kildare Chilling have mutual respect for one another.
Producer viewpoint: Kildare Chilling
Kildare Chilling’s Seamus Finucane said the big plus of working with the Mayo Blackface group was the fact they supplied a universal lamb which could be sold into a number of different markets. Originally, lambs supplied by the group were sent to a light lamb market in Tunisia. However, when this market disappeared, farmers were encouraged to increase lamb weights.
The extra 2kg to 3kg carcase weights achieved by the group now make them suitable for markets in Sweden or France. The fact that the majority of lambs supplied are also quality assured (QA) means they can be sold on Irish supermarket shelves.
Finucane said the ability of the group to deliver the lambs dry and clean to the factory was also important. He credited the attention paid by the group to the Clean Livestock Policy and the standards adhered to by their haulier, Gill Transport.
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