Presentation to The Beef Forum IFA President Joe

Presentation to The Beef Forum IFA President Joe Healy Irish Farmers’ Association Nov 17 th. 2016

2 The Beef Forum • Objective of the Forum – strategic approach to support the development of the beef sector. • Must deliver for Farmers and the beef sector • Improving profitability of livestock farmers – biggest challenge - priority issue. • Profit Plan for beef farming. • Growing output alone, without improving incomes on livestock farms is an unsustainable strategy • Dealing with the outstanding Beef Forum issues

Outstanding Issues • Forum must deal with outstanding issues agreed in November 2014. • Price Transparency - Develop an accurate Market index. • Specifications – Weight/Age/Movements – Need specifications that match our production systems – Damage of weight limits to the suckler herd/QPS. – Increasing the age limit from 30 to 36 months. – Flexibility on movements/residency for Marts and in-spec bonus. DAFM to adjust AIMS on counting farm residencies. 3

Beef Forum Outcomes 4 • QPS – no dual base price by breed/age/weight /QA status. • Contracts – processors to increase the use of contracts. • Live Exports – DAFM to remove barriers to trade to Northern Ireland UK. • Trim – DAFM to make AO’s responsible for monitoring trim in meat plants. • Forum must deliver on these issues – credibility.

Incomes and Price 5 • Incomes on livestock farms are exceptionally low and need to rise. Farmers have € 7 bn invested in stock. • National Farm Survey – Average incomes of € 12, 660 (cattle rearing) to € 16, 316 (cattle other), made up of 100% direct payments. • Teagasc – based on the costs of production on the most efficient farms – need a beef price of € 4. 00/kg (grass beef) to € 4. 50/kg (winter beef). • Profitable beef farming is essential for the development of the Irish beef sector

Challenges 2017 6 • Major Income challenge at farm level. • Loss making prices – below costs of production. • Additional 100, 000 + head of cattle? • Brexit and currency into our main export market. • Uncertainty – Producers losing confidence and need direction.

Market Balance 7 • Market balance on supply/demand to support viable prices. • 1. 7 m slaughterings projected for 2017 • Problem territory – last seen early 2000’s, following a period of very low live exports. • Dairy farmers will not be the beef farmers of the future. • Need a strong live export trade for calves/weanlings/stores/finished cattle for competition and market balance. • Breeding/Purchasing/rearing calves in 2017 for 2019. Need guaranteed price contracts.

Competition • Unfair imbalance of power in the supply chain between farmer/processor/retailer. • Since 2013 major change in the Irish/GB price differential (R 3 steer). • Average price difference 2000 -2012 =26 c/kg. • Average price difference 2013 -2015 =68 c/kg. • An additional € 150 per animal - loss of competition/selling power. 8

Competition - Retail 9 • Since Brexit UK retail beef prices have decreased. • However GB cattle prices have increased by 28 p/kg. (33 c/kg) • Some suppliers (Unilever/Nestle) demanded/secured price increases. • In a properly functioning market, UK retailers would be paying higher prices for Irish beef to compensate for the fall in sterling. • Retail regulation – EU Market Task Force – legislation banning unfair trading practices and mandatory price reporting.

Brexit 10 • The collapse in beef prices as a result of Brexit is a market disturbance under CAP, similar to the Russian ban, and justifies direct action by the EU Commission. • Need a strong national and EU response. • Assistance for livestock farmers focused on price, markets and direct supports. • Increased marketing and promotion.

11 CAP and Direct Supports • Increase direct support for suckler cows • BDGP – not adequate in terms of financial support. • € 200 per cow direct support to maintain the suckler cow herd. • Every € 1 of direct support underpins € 4. 28 of output in the economy. A Renwick UCD 2013. • CAP – 2020 plan. Need a strong CAP Budget supporting active producers.

Market Access 12 • Market access – slow progress • Increased resources and dedicated personnel in DAFM on beef market access and the live cattle trade. • Live export markets need to be prioritised.

Beef Farmers • Beef farmers are committed to progressing their enterprises. • 47, 000 beef farmers in Bord Bia Quality Assurance Scheme • Over 90% of beef output audited and carbon foot printed. • 25, 000 suckler farmers in BDGP scheme • 1, 000 Knowledge Transfer Groups • ICBF – 14, 000 livestock farmers in Herd Plus • BETTER farm programme • BVD scheme – Farmers in 4 th/5 th year. 13

Quality Assurance • IFA demanding a simpler, more farmer friendly Bord Bia QA scheme • New close out period to resolve compliance issues 14

Trade Deals 15 • The EU Commission report has highlighted the devastating impact of further trade concessions for beef. • Ireland is the most exposed member state. • Mercosur, in particular, is a red line issue. • No room for any increase in EU beef imports in TTIP. • All imports must meet full EU equivalence on standards

Action Points Beef Forum - must deliver for farmers Incomes – beef farming must be profitable Price - € 4. 00/€ 4. 50 required Brexit – strong Government and EU response Market Balance – Live exports Market access – more resources – beef/live Food Chain – fair share of returns CAP and sucklers - € 200 direct support per cow • Trade deals – no concessions on beef • • 16