16th March 2012
ICSA beef chairman Edmond Phelan today said that beef factories must clarify where they stand with bull beef production. Mr Phelan was reacting to efforts by meat factories to impose cuts on lower grade bulls and heavier bull carcases with some reports of 10-15c/kg discounts being quoted.
Mr Phelan also pointed out that the failure to include bulls in the beef grid indicated that meat factories were not supportive of the production of top grade U+ carcases from young bulls.
“Farmers who produce top quality young bulls are not getting properly rewarded in beef factories. While U+ steers can get up to 30c more than the R grade base price under the beef grid, no such premium applies to bulls.
“The grid system is unbalanced and works against the farmer because a substantial proportion of the better cattle are now being finished as bulls whereas the lower quality cattle are much more likely to be finished as steers. Consequently, they lose out under the grid but there isn’t a corresponding increase for the bulls.
So far, in 2012, we have seen a 16.6% increase in young bull slaughterings compared with a 25.7% decline in steer slaughterings.
This means that young bulls are accounting for 28.5% of the total prime cattle kill in 2012 compared with 10% in 2009 and just 3% ten years ago.
The problem is that meat factories seem content to allow farmers to switch to bull beef production in substantial numbers without indicating if there are markets for all this bull beef. Factories have been very quick to campaign for an increase in the suckler herd but this is a potentially disastrous policy if there is no appetite for bull beef production.
The reality is that Irish finishers are competing strongly at the weanling sales for heavy U grade continental weanlings. These animals are too strong for castration and are ideal for bull beef. Suckler farmers, in turn, can’t afford to be producing lighter calves or traditional breeds because they just are not capable of getting prices in the region of a €1000. While there has been progress on getting bonuses for Angus and Hereford Prime beef, factories have given no signal that they have an appetite for substantial increases in traditional breeds.
Factories need to make up their mind whether they wish to support bull beef production and by extension, whether they wish to encourage the retention of the suckler herd. This will require that U+ grade bulls are paid well in excess of R grades as happens with steers on the grid.
Mr Phelan also suggested that it might be time to review the operation of the grid system. He said that the grid still had a credibility problem. “One issue is that the base price is often misleading as there are too many categories of cattle below the R3 base which are cut. It might be more accurate to have a lower base, such as 03, with the majority of cattle then qualifying for a bonus rather than a cut.”