Fewer farmers fattening cattle as prices plunge

Last Wednesday in Roscrea, Co Tipperary, I asked a farmer why he was picketing the meat plant

Last Wednesday in Roscrea, Co Tipperary, I asked a farmer why he was picketing the meat plant. He said he was there because he had nowhere else to go if the dispute failed.

He was one of a diminishing number of so called "winter finishers", who earn their living in the most precarious sector in Irish farming, fattening cattle for sale from January to April. "If we don't win this one, I am out of business. I borrowed heavily to buy stock in the autumn and I have made a loss so far. This is the second bad year and the bank manager will have me for sure," he said.

He was typical of the men and women who were at the blockades for the past seven days. They are people who look well off, drive four-wheel-drive vehicles and have large farms but are borrowed up to the hilt.

While 80,000 farmers own beef cattle and dabble in selling them, with an average herd size of only 12 animals, most of them are not serious players in the market.

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The smaller farmers tend to produce their beef off grass, or sell animals to larger operators to be finished for the market. While the factory price is important to all farmers, it is vital to about 20,000 or so specialist operators.

They have experienced a double hit this year, because even in hard times all they had to ensure was that the margin between the price at which they purchased animals and the selling price was enough to give them a living wage.

But earlier this year, the live export trade in young cattle to the Continent took off and the live trade to the Lebanon began to make inroads into the market, which meant that they had to buy at higher prices.

Only a higher return from the factories when the cattle were finished could have given them the kind of financial return they needed to stay in business - but that was not forthcoming. Teagasc's beef production expert, Mr Bernard Smyth, confirmed yesterday that independent research carried out by Teagasc, the agriculture and food development authority, has shown it costs farmer/finishers 85p per lb to produce cattle for this time of year.

"We arrived at that figure having studied the most efficient farms in the Republic, so it would be necessary to have a return higher than 85p to make any kind of profit. I think 90p per lb would leave a fair margin," he said.

He said that since the BSE crisis in 1996, which sent prices plummeting and led to beef being sold into EU intervention to prevent total collapse of the industry, the business of finishing had changed dramatically.

The farmers who had the resources began breeding their own cattle so they had control over the raw material and this had worked quite well for some of them.

Others, he said, had sublet their wintering sheds to farmers or other individuals who took the chance on finishing animals. Others had gone into the business of finishing cattle for bigger farmers or factories for a fixed fee.

"Overall, it is a very diminished pool of people and a lot of finishers have cut their losses and their sheds remain idle or are leased to other operators," he said.

He said some farmers had decided to breed good-quality continental type cattle and they were being paid more for those animals than was on offer for the average-type animal.

"Unfortunately, only 5 per cent of production is generated by specialist producer groups who make their own deals with factories and get considerably more than what is on general offer," he said.

The problems facing the farmer seem to contrast with the good year Irish factories have had. They have yet to deny that over £50 million profit was made by the plants on the one million animals they killed last autumn.