Beef Talks Agreement

The main outcomes in the agreement involved an increase in bonus payments to farmers selling cattle to factories.

In addition, there are important issues on a new Beef Price Index and transparency, a review of the price grid and market specifications as well as the price composition along the supply chain and the value of the fifth quarter.

The increases in the in-spec bonuses and the payments on over 30-month cattle are worth a total of €25m pa.

The in-spec bonus for steers and heifers will be increased from 12c/kg to 20c/kg. This is worth an additional €28 per head on the average steer.

There is a new bonus of 8c/kg for steers and heifers between 30 and 36 months of age, that all other existing in-spec criteria, again worth an average of €28 per head.

Steers and heifers grading O- and fat score 4+ meeting all of the other in-spec criteria will receive an in-spec bonus of 12c/kg, worth about €40 per head.

The in-spec 70-day residency requirement will be reduced to 60 days on the last farm.

President Joe Healy said while this is not a perfect deal, a realistic agreement had been achieved and will be recommended by all the farm organisations to their members.

Bord Bia has developed a new Beef Price Index based on 3 components; cattle price index, beef market price index (retail and wholesale) and an offal price indicator, which will be introduced immediately and provide key information to track market returns to cattle prices.

The Department of Agriculture have agreed to conduct an independent review of market and customer requirements specifically of the four in-spec bonus criteria including the 30-month age requirement.

The Department have also agreed to an independent examination of the price composition of the total value of the animal including the fifth quarter, all along the supply chain.

A new Beef Market task Force will be established by the Minister, independently chaired, to implement the agreement and provide a platform for stakeholder engagement.

Bord Bia will intensify promotion of Irish beef across key EU markets and China. The DAFM and Bord Bia will develop a PGI (Protected Geographical Indication) for Irish beef.

As well as the beef price index, the DAFM will provide additional price reporting on the Beef Price Watch app and retail customers will be invited to the Task force on market requirements.

There will be a consultation process on the Unfair Trading Practices directive including the requirement for an independent regulator.

The agreement is clear that live exports are a critical outlet to improve competition in the sector and will be supported.

The IFA position has always been that all prime cattle from Quality Assured herds should receive a QA bonus, with no other additional specification or criteria, such as the 30 months age limit.

IFA supports the independent review of the in-spec bonus criteria agreed with Minister Creed.  IFA has made it clear that if the review shows that these specifications are not justified, then they should be removed.

Along with membership of the QA Scheme, the 30-month requirement is one of four other criteria applied by factories to qualify for the 12c per kg ‘In Spec’ bonus payment.

These additional criteria are: animals under 30 months of age; maximum four farm residencies;70-day residency prior to slaughter; grades of O= or better, and between 2+ and 4= fat score.

To justify these specs, the meat factories have stated that these are demanded by some other countries and by some retailers, particularly in the UK. This position has been supported by Bord Bia and the Department of Agriculture.

The 30-month rule has its origins in the BSE crisis. Time has moved on and there is no longer any veterinary basis for the rule. However, some countries and some UK retailers continue to have it as a requirement. If we want to supply their markets, we have to meet their specifications.

DAFM and Bord Bia analysis show that currently 44% of steers (295,000) and 59% of heifers (287,000) meet the criteria and get paid the bonus. At 12c/kg this is worth €24m pa.