Beef processors must realise the importance of the high-quality of the product that they purchase from farmers, which is “essential to their success”, according to Jim Power.
The leading economist, who was commissioned by the IFA to examine the current challenges facing beef production in Ireland, believes processors need to press for higher prices for the product that they sell and work more closely with farmers to achieve this.
“Irish suckler beef is a premium product and processors should be able to achieve a price that would make beef production viable for farmers.
He noted that for a farmer, covering the cost of production (which “should include a normal profit”) is essential to stay in business. “It is in the interests of processors to work with farmers to achieve this.”
“The success of the Irish beef sector is totally dependent on farmers being able to achieve a fair price for their product. That is not the situation at the moment.”
“Teagasc research suggests that for a farmer to break-even for bringing a suckler calf-to-beef, €4.17/kg would be required.”
In the recently published report, Power commented that Teagasc conveyed some messages to suckler farmers, including the point that improving efficiency still pays; current beef prices make all suckling systems loss-making; and with low beef prices, the strategy has to be to cut all costs wherever possible.
“The suggestions include reducing the meal bill to a minimum; having a very basic fertiliser programme; no reseeding; no new investment in machinery or stock; cut maintenance costs to essentials; and examine all health costs critically.”
“While these suggestions make certain sense, it is not clear that they are compatible with preserving the Irish suckler herd.” Power added.