Only a minority of the best-run beef farms in the State is currently making a profit over and above the various EU premiums, farmers attending the Teagasc National Beef Open Day in Grange, Co Meath, were told yesterday.
The agriculture and food development authority's chief drystock adviser, Mr Bernard Smith, warned that the value of the single payment farmers will receive for all premiums from next year will be eroded as time progresses, and beef farming would have to stand on its own two feet if farmers were to make a viable income.
Mr Smith, speaking at the event, which attracted 10,000 beef farmers, forecast that the beef farmers who applied the best production technology and produce product for consumer markets could look forward to increased incomes in the new era from January 1st next.
But Mr Smith warned that an increase in beef prices would be a prerequisite to profitable farm production, and this could be best achieved through expanding partnerships between farmers and meat processors.
He said that in the new situation where premiums were being decoupled from production, a price rise would be essential for beef produced during the expensive winter period and there would also need to be a much higher premium for quality beef produced from suckler herds.
"Farmers who cannot generate a worthwhile margin, excluding the new single farm payment, will find the payment being used to cover production costs and they will have no future in beef farming," he said.
"While the single payment will be a vital component of farm income, particularly in the medium-term, its value will be eroded over time and beef farming must stand on its own feet if farmers are to make a viable income," he said.
He said that almost half of the farms used by Teagasc as monitor farms to promote new technology achieved margins of over €600 per hectare in 2003, and the performance of these farms was likely to increase in 2004 because of higher beef prices.
Teagasc used the occasion to launch blueprints for profitable beef production following decoupling, giving details of research on its farm where superior cows and bulls, delivered more than €200 per hectare in additional revenue. Dr Eddie O'Riordan, head of the research centre, said liveweight gains of 200kg per animal were achieved and savings of €40 per tonne were made on compound feed.