Pro­duc­tion cuts needed to get beef prices back on track — ICSA

Irish Independent - Farming - - NEWS - DE­CLAN O’BRIEN

SIG­NIF­I­CANT cuts in do­mes­tic beef pro­duc­tion to get sup­ply and de­mand back into equi­lib­rium is the only so­lu­tion to the cur­rent cat­tle-price cri­sis, the ICSA has claimed.

The dry­s­tock farmers’ body main­tained that live ship­ping had to be ramped up to take out tens of thou­sands of calves that can­not be prof­itably fin­ished.

ICSA also in­sisted that all calves from the dairy herd with any Jersey in­flu­ence what­so­ever must be de­clared part-Jersey at the point of sale so that farmers are

“not duped into buy­ing” the stock.

In a broad­side on cur­rent farm pol­icy, ICSA main­tained that Food Wise 2025 had “failed dis­as­trously” to take ac­count of the un­in­tended con­se­quences of dairy ex­pan­sion on the beef sec­tor, and was un­der­min­ing Ire­land’s po­si­tion as a ma­jor beef ex­porter.

“The re­al­ity is star­ing us in the face, which is that we do not have suf­fi­cient out­lets for a weekly kill of 40,000 head. It is fu­tile de­mand­ing a price equat­ing to cost of pro­duc­tion plus a mar­gin when our weekly kill is just too high,” said ICSA beef chair­man Ed­mund Gra­ham.

“In De­cem­ber 2017, I got €4.10/kg flat for bulls un­der 24 months. Now the price is €3.80/kg for U grades and €3.70/kg for Rs, or an av­er­age of €3.75/kg. On a 400kg car­cass, that equates to €140/hd,” he pointed out.

“In ad­di­tion, I es­ti­mate in­creased feed costs due to drought at €50/hd. Thus the bull beef sys­tem is €190/hd worse off. Even in good times, this is a low mar­gin sys­tem and a down­turn of €190/ an­i­mal can­not be car­ried for long.”

The ICSA rep­re­sen­ta­tive asked if the cost of dairy ex­pan­sion was “too high for the beef sec­tor”, with 400,000 ad­di­tional calves born, as well as ex­tra cull cows.

Echo­ing con­cerns ex­pressed by Pearse Kelly of Tea­gasc, Mr Gra­ham said the in­creas­ing Jersey and Kiwi in­flu­ence in the dairy herd was mak­ing many of the calves to­tally un­vi­able for the beef farmer.

“Whereas the use of pure­bred Jersey bulls is very much a mi­nor­ity thing, there is Jersey in­flu­ence in many bulls that are nom­i­nally Friesian. Feed­lots es­ti­mate that these calves are worth mi­nus €165 when all the sums are done. Even where tra­di­tional beef­breed bulls are crossed with these [dairy cows], the calves are re­ally un­sat­is­fac­tory for prof­itable fin­ish­ing,” Mr Gra­ham main­tained.

“Dairy farmers can’t be blamed for fol­low­ing the money when it comes to milk solids, but we need a com­plete re­think at na­tional level.

“Is it wise to ig­nore the re­al­ity that the cur­rent dairy ex­pan­sion strat­egy based on the New Zealand model is not com­pat­i­ble with want­ing to also be a lead­ing ex­porter of beef,” he asked.

“To get to the stage where we can get a price that leaves farmers with a fair mar­gin, we first have to tackle the chaotic over­sup­ply of cat­tle. Ob­vi­ous- ly a key re­quire­ment will be to build a much big­ger trade in live ex­ports but this is eas­ier said than done,” Mr Gra­ham said.

A re­cent Com­mis­sion anal­y­sis of the EU beef mar­ket, high­light­ing that to­tal EU pro­duc­tion for 2018 is up 2pc as a re­sult of this sum­mer’s drought, with heifer out­put up 7.7pc and cows up 3.9pc.

An­gus Woods of IFA said the prospects and fore­cast for 2019 were more pos­i­tive, with re­duced pro­duc­tion and a more sta­ble mar­ket and price en­vi­ron­ment.

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