29 OCTOBER 2019
ICSA beef chairman Edmund Graham has said that the only solution to the dairy bull calf dilemma is for dairy farmers to get beef farmers to contract rear the calves. He added that ICSA would be totally opposed to taking scarce CAP or state funds to subsidise dairy farmers when beef and sheep farmers have incomes which are a tiny fraction of what dairy farmers earn.
“This problem cannot be resolved by transferring the risk to beef farmers who are already at breaking point. It is futile to think that beef farmers can be expected to buy calves at a beef price of €3.45/kg and take all the cost and risk of rearing them for two years. There is no appetite any more for gambling that beef price might recover to an economically sustainable level in the future.
The reality is that losses are certain at current beef price. Even if the beef merit of calves improved significantly, beef farmers will not get a return on their labour and their investment. Giving them a subsidy to buy dairy calves will not work because it will simply flow back into the calf price and thereby is a further support for dairy farmers. Also, subsidizing home rearing would undermine live exports as the two would be in direct competition.
The problem is that dairy expansion has been built with a cavalier approach to proper analysis. The admission by the head of Teagasc Moorepark that they never thought about the bull calves is shocking. It demonstrates that the foundations of farm economic analysis are seriously flawed.”
ICSA has repeatedly warned that profit monitors which ignore the cost of a farmer’s own labour and owned land are not worth the paper they are written on. “Hence, the idea that Irish dairy farming can produce milk at 25c/l must be rigorously questioned. This has led to a kind of hubris that we are vastly more competitive than other EU dairy farmers. Worse still, it manifested itself in Ireland opposing French demands for voluntary cut backs in milk production a few years ago when price was falling because we thought we could ride out the storm. In the end, the French policy prevailed, and their prescription was helpful.”
“The same lack of holistic analysis is now emerging when we see that the blinkered focus on breeding a dairy cow on the basis of constituents, small body size and easy care is blowing up in our face. The calves from these Jersey/New Zealand influenced genetics are absolutely useless for beef farming.
Teagasc have admitted that some calves from the dairy herd are worth minus €200 and even the beef cross calves are worth virtually nothing, at current beef prices. Clearly, beef processors and retailers have a lot to answer for. Retailers are not supporting Irish farmers when they buy beef at below the cost of production, they are exploiting them. However, even if beef price rises, the beef merit of dairy breeding will have to be brought centre stage in examining the sustainability of dairy systems.
In practice, a dairy farmer who breeds a calf with negative value for beef breeding cannot expect his beef farming neighbour to absorb that cost. Instead, it needs to be part of the dairy farm’s costs.
It is clear now that dairy expansion can only be done with dairy farmers being responsible for all of their breeding decisions. This means male calves as well as female calves. If dairy bull calves can be exported to the Netherlands well and good. Otherwise, a profitable dairy farm will have to absorb the risk of finishing these calves. This can be done by paying beef farmers to contract rear them. It will also come with the added benefit of making dairy farmers properly cost the impact of their breeding decisions and will reward the dairy farmer who chooses to follow a more balanced breeding programme rather than trying to go extreme New Zealand. It might also bring a more nuanced assessment of whether milk price is too low to be sustainable.”