IS GM-FREE A MARKET TREND OR A CONSUMER FAD?

This post first appeared online at http://www.thatsfarming.com on the 25th October 2017

Twenty years ago, I became involved with soybean production in SE Europe. Romania was then a GM-soybean producer; now it is not. The GM-free debate is old hat. And it was a decade ago that I came across the Danube Soya initiative to establish a certification scheme to produce GM-free, European-grown soybeans from the many countries through which the Danube passes.

Working long-term in the region means that one is focused on markets of central Europe and one soon became aware of the importance of sustainable foods issues in these markets. GM-free was one of them. European-grown GM-free soybean was seen by some as the way forwards as consumer demand for GM-free grew; more so when GM-free fed livestock products were demanded. And it was not going to only be a German-Austrian market issue. In 2016, Waitrose’s dedicated pork supplier, Dalehead Foods took its first consignment of European soybeans as the premium retailer began rolling out its plan to replace its [already] responsibly sourced soya beans from non-deforested land in Brazil. The soybeans are certified GM-free by the Danube Soya Producers Association. It is not just German supermarkets taking GM-free supply-chains seriously.

Hence, it was somewhat surprising to read that the CEO of Bord Bia believes that it is necessary to first establish whether non-GM is a market trend or a consumer fad. If Ireland is a dynamic and innovative foods producer, it is a little late in the day to be asking such a question. Market research and marketing is meant to keep one at the forefront and ahead of the game. It is now possible that Ireland will only move after it realizes that it must have GM-free certified products if it wishes to maintain sales to German supermarkets. And making the change will not be done overnight, it will be difficult but the lack of urgency is palpable.

To a degree one can understand the caution. Irish farming and food does seem to have a predilection for ‘science’ when it comes to food production, and GM is seen by some as a desirable part of modern food production. It is reflected in the approach that it is about educating the consumer rather than following consumer demand. It is a part of a wider supply-driven rather than market-led malaise that pervades the Irish farming industry. With GM-free feed one can also understand that an Irish farming industry wide change over to GM-free will have costs and it will have its difficulties; and farmers rightfully ask if they will be paid a GM-free premium.

And therein lies the second part of the problem; the change-over seems to be seen in the context of it being an industry-wide change. Presumably it is looked upon as an activity that will have to be incorporated into and administered through the near national quality-assurance schemes. One can be sure that there are food producers in Ireland who are already producing GM-free products; albeit often using imported ingredients, so it is not exactly new. And as mentioned, Waitrose in the UK is taking measures to improve its sustainability credentials with respect to GM-free. These are, however, individual initiatives, they are not national ones.

Going GM-free is not about national certification, it is about developing specific supply-chains. It is certainly an idea that the Irish tillage sector would embrace. It does, nonetheless, mean that specific GM-free products must be created and supply-chains and routes to market for them developed. It is, frankly, something Ireland, with its largely centralized processing of livestock products, is not very good at. For example, GM-free [and grass-fed beef] is now nothing new and there are many producers of such around the world, from Russia to Romania to Tasmania to the United States, not to mention internally within the European Union. One doubts if they have developed GM-free certification for a consumer fad. When it comes to GM-free, Ireland is already playing catch-up.

Being behind the curve is somewhere that Irish farming, with its small production scale, cannot be. It must be a premium-products producer. It must be part of dynamic and innovative supply-chains that reach premium-paying consumers. The country’s position on GM-free illustrates that it is being found wanting. Irish farming needs to be reaching the top of the market and to do so it needs routes to market that are flexible rather than centralized and industrialized. GM-free is more than about supplying premium, GM-free products, it is about starting the processing of developing a capacity to supply the 80%-plus market position as opposed to the premiumized-commodity markets.

Going GM-free is about much more than GM-free, it is about being willing to make the serious and often relatively small changes needed to develop the country’s routes to markets. It is about linking its farmers to premium paying consumer and ensuring that its farmers benefit. It is a fair bet that continued centralization of processing and accreditation will destroy Irish farming as we know it.

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IS MINISTER GOVE GOING TO BREXIT BY THE GREEN DOOR?

This post first appeared online at http://www.thatsfarming.com on the 20th September 2017

Is a prerequisite for a politician to be able to balance one’s principles with the winning of votes? One wonders if Michael Gove is not showing himself to be particularly adroit on this front and he begins to fashion the UK’s exit from the Common Agricultural Policy?

My expectation is that the Minister will be an advocate of free trade that will facilitate UK access to low-cost foods from the Globe’s cheapest producers. There is, however, a strong political lobby demanding that food and environmental standards are maintained, even enhanced, after Brexit and the Minister appears to agree; he is going to attempt the impossible and to balance the two, apparently, widely differing objectives.

And where does one find those lobbying for British farmers in this Ministerial conundrum? There used to be a day when the Tory Party had a bulwark of MP’s from Shire farming families but, alas, no longer. That, and the political weight of a now small farming population means that farmers will have to accept what Brexit serves up for them; they are going to be policy takers, not policy makers.

UK farmers will need to protect their own market position by the continued adoption of food-safety, food-quality, environmental and animal-welfare standards. Red Tractor is well established but maybe it will have to go to Red Tractor Plus. There are other schemes relating to geographic origin and animal welfare but, that said, the UK lags Italy and France when it comes to quality-focused designated-origin schemes. That will change as UK farmers realize the full necessity of ratcheting up their standards and communicating the associated message to the consumer.

Trade agreements will allow easier access to UK markets but they will not mean a diminution of what is demanded by food processors and retailers to ensure that their due diligence is visibly in place. It is due diligence requirements, not legislation and regulation that will limit UK market access. Ireland with its QA and sustainability schemes meets the required due diligence standards, but so will the likes of NZ and Australia. They are not a barrier to entry to rely on into the long term.

Increasingly one’s expectation is that the lion’s share of farm support will shift from production-related support to rewarding farmers for delivering upon environmental and quality objectives. It will include transitory mechanisms that will encourage and facilitate change. Post-EU, British food and farming policy will emerge with a thoroughly green hue.

Just how will a Green-door Brexit impact upon Ireland’s farmers? They and their supply-chain partners will have a choice; either they compete in the UK market place on cost with global, also quality-assured suppliers or by raising their standards, be they environmental or quality, to focus on the upper echelons of the market. Will they join UK farmers in a race to the top?

That Irish farming can compete on cost is a grass-based myth. Certainly, a well-consolidated and well-invested agri-food processing sector may be able to compete with the global players, but can it truly do so in a long-term, sustainable way if the structure of the Irish family-farms that underpins it is unsuitable for the task of producing its low-cost raw materials? The danger for Irish farmers is that the processing sector will look elsewhere for its supplies, it is already doesn’t.

For Irish farmers, supplying the UK must be about matching, if not bettering, the food safety, food quality, environmental and animal welfare standards implemented within the UK post-Brexit.

Yes, the QA schemes have met supermarket demands and other schemes have met the demands of, for instance, the burger chains. Ireland now, nonetheless, needs to develop schemes that meet premium-paying consumer demand with the right consumer-facing products. They need to reach the market via supply-chains that ensure that the farm-gate price received by farmers is boosted as a reward for delivering what the market wants, be they in the UK or elsewhere. Irish farming policy must focus upon quality-enhancement. It is long overdue but with Brexit it must now happen.

The UK has an advantage in that Brexit will allow it to develop its own farming and food policy and to tailor it to meet its own Green-door objectives. As the UK is and will remain such an important market for the Irish farming industry, Ireland must follow. It will, however, be a challenge to determine how to offer support to facilitate the necessary changes and to create a level support playing field with the UK as it may not be a priority for a post-2020 CAP. Post-Brexit UK farming and food policy may be a revolution whereas, to be honest, one cannot expect more than a CAP evolution.

With Brexit, there remains so very much to think about.

MARKETING CHAROLAIS CATTLE IN THEIR HOME MARKET

This post first appeared online at http://www.thatsfarming.com on the 15th October 2017

How the French go about labelling Charolais Beef

As one should expect with beef produced in France from Charolais cattle, there is no such thing as ‘French Beef’ or even ‘Charolais Beef’, it is rather more ‘complicated’ than that!

The BŒUF DE CHAROLLES appellation d’origine contrôlée

The AOC Bœuf de Charolles is the ‘summit’ of Charolais beef production in France as it is Charolais beef from the Charolles itself. Although it is from the historical home of the breed the AOC only dates from 2010 and the EU PDO designated origin registration from 2014. This itself illustrates that French food-product labelling is still evolving.

Farming Charolais cattle in the region within the AOC scheme is about enhancing the value of the product at the farm-gate to maintain the viability of local cattle farming and it is about the preservation of farming traditions and the local hedgerow-lined pastures and their biodiversity.

To qualify for the AOC, farmers must meet strict standards. The cattle must be born, reared, fattened and slaughtered in the designated geographical area. The calves must be 100% Charolais and suckler reared. The cattle must be grazed for a minimum of 200 days per year at stocking rates not exceeding 2.0 livestock units per hectare. Fattening must occur on specified ‘fattening pastures’. These pastures are permanent and must not receive any artificial fertilizers. It is said that the pastures enhance the flavour of the meat. In winter only locally-produced hay is fed and silage is not allowed. The use of complementary feeds is limited to an annual average of 2kg per day during rearing and 1kg/day/100kg LW during the finishing period. Concentrates feeds must be based mainly on linseed and GMO feeds are forbidden.

Heifers must be at least 28 months of age at slaughter with minimum carcass weight of 320kg. The bullocks must be at least 360 kg and have a minimum age of 30 months. Cows that are used for Bœuf de Charolles beef must be no more than 8 years old [96 months]. The traditional slow finishing is required to produce beef with the characteristics required of Bœuf de Charolles, a finely marbled beef that must be matured for at least 14 days. Slaughter must be local to minimise stress.

The BŒUF CHAROLAIS DU BOURBONNAIS EU PGI

The Bœuf Charolais du Bourbonnais is also a Charolais-breed-specific EU registration; albeit as a Protected Geographic Indication [registered in 1996]. As the name suggests, the cattle must be reared in the Bourbonnais region. The beef also qualifies as Label Rouge.

The required production systems are not dissimilar to the earlier AOC although not as restrictive in terms of pasture management. Ages at slaughter are the same although the carcass weight minimums are 20 kg lighter. The minimum maturation period for carcasses is 10 days.

As with many designated-origin systems in France, the production volume is limited as there are only about 120 farmers supplying Bœuf Charolais du Bourbonnais beef. The sales are mainly through traditional butchers.

The CHAROLAIS DE BOURGOGNE EU PGI

The third and most recent [2017] EU PGI designation for pure-bred Charolais beef, the Charolais de Bourgogne beef differs from Bœuf de Charolles and Bœuf Charolais du Bourbonnais in that it is not so focused on traditional, slow production. Males must be slaughtered at between 14 and 24 months of age. For heifers the minimum age is 24 months and they must be grazed for two seasons. The slaughter weights required are lighter again at 320 kg and 280 kg for males and females respectively. Cows must not be greater than 10 years of age. A minimum maturation time of seven days is required and the beef may be sold fresh or frozen.

Feed must be based on grass and forage exclusively from the PGI geographical area. This means that the cattle must be raised on the regions natural, biodiversity and flora-rich grasslands. Hay is the required winter forage. Again, as with the Bœuf de Charolles, there is the link to the preservation of the local bocage country and its traditional hedgerows and meadows.

During rearing, concentrate usages if limited to an average of 2 kg per day. A more intensive finishing is allowed; a reflection that the PGI is about using Charolais cattle within a specific region but with more ‘modern’ farming methods than the PDO/AOC Bœuf de Charolles allows.

LE CHAROLAIS TERROIR and TENDRE CHAROLAIS Label Rouge

Beef which qualifies as produce of the Bœuf Charolais du Bourbonnais PGI region can also carry the Label Rouge superior-quality label. In addition, there are also other Label Rouge Charolais labels including Le Charolais Terroir and Tendre Charolais.

Tendre Charolais again stipulates that the cattle must be 100% Charolais and born, raised and slaughtered in France. The use of suckler rearing, minimum grazing periods and forage use within the diet are specified. The scheme also imposes housing and animal welfare standards and rules are laid down with respect to slaughtering and the aging of the beef.

Tendre Charolais is a marque of the L’Association Charolais Label Rouge; a supply-chain association whose role is to ensure the quality of ‘tender beef’ from the Charolais breed. It includes 4,500 farmers, 27 co-operatives and nearly 250 other entities including butchers and retailers.

Tendre Charolais also aims to ensure that there is equitable remuneration for each actor within the supply chain including the farmers. It seeks to ensure that there is a future for extensive livestock farming and the regional landscapes and that local, rural employment exists.

Charolais Terroir is another label that encompasses a complete supply-chain approach. As with all the other labels mentioned, it specifies that all cattle must be pure-bred Charolais. The emphasis is then upon the selection of the right live animal to deliver specific carcass characteristics, how the animal is transported, handled, slaughtered and processed, and the quality of the final carcass. The carcass can then be sold with both the Charolais Terroir and Label Rouge labels attached.

Overview of some of the French labeling schemes

The French have a long history of designating their food products. The first cheese was designated under France’s appellation d’origine contrôlée [AOC} system in 1925 and the first meat in 1957.

Many AOC products now also have one of the following EU designations:

Protected Designation of Origin [PDO]: covers agricultural products and foodstuffs which are produced, processed and prepared within a given geographical area using recognised know-how.

Protected Geographical Indication [PGI]: covers agricultural products and foodstuffs closely linked to the geographical area. At least one of the stages of production, processing or preparation takes place in the area.

Traditional Speciality Guaranteed [TSG]: highlights the traditional character of the product, either in the products composition or means of production

France has eight EU PGI’s for beef and veal and this reflects their emphasis upon locality of origin. A further three more production and location specific PDO’s exist.

Another premium but lower strata label developed in France is Label Rouge. There are 36 beef and veal Label Rouge products, mainly differentiated by locality of origin and a specific breed.

In addition to these official labels, the producers also use their own labels.

Label Rouge is a quality assurance marque controlled by the French Ministry of Agriculture. It attests that food or non-food and unprocessed agricultural products have specific characteristics that establish a superior level of quality [especially resulting from their specific production conditions or workmanship] to similar products. The Label Rouge marque is to be found on bread, honey, herbs, dairy products, eggs and poultry, beef and lamb and charcuterie.

Label Rouge products may also be distinguished by a producer-group label, AOC status, an EU designated-origin marque and be organic. It is possible for a product to display all of the labels.

 

THE REWARDS MUST GO TO THE RIGHT PEOPLE

Storm Ophelia recently reminded people of how fragile our modern way of life is. Take away our electricity and gone is our entertainment; as batteries run dry our communications crumble; and even hot water for tea becomes scarce. Of course, many have faced real difficulties but too few will appreciate just how fraught it is to be faced with having to water, feed and milk farm animals.

Farming is a tough profession to follow, one that falls to those with a calling and a love of the land. But still one wonders, just why do farmers do it when the rewards nowadays offer meagre recompense for the farmer’s efforts?

My memories of farming go back to when I was three. I spent my summer days in the farm lorry carting grain or in the Landrover checking our International TD crawler drivers contract ploughing around the neighbourhood. They are remembered as halcyon days? As I now look back I appreciate that farmers were better rewarded then; it was an era when people knew who fed them during the Second War and then, post-war, ensured that they again became well-fed. How times have changed.

Later, the 80’s were about joining the 10-tonne club. It was a time when it was all about yields per hectare and per head. It was an era when farmers adopted technology with alacrity. It was about and adding yet more input so long as the extra yield outweighed the unit cost.

I noticed early in my farming career, courtesy of those same crawler drivers, that we had started to isolate our decision-making from the soils. They were becoming no more than a ‘growing medium’ as plant growth became all about chemistry and the feeding of crops with ‘artificials’. It was also about the time when the soil scientist became extinct. As with our domestic cookery, everything be it plant or animas was being fed out of a bag, can or bottle.

In the 90s as a farm business economist, I began to clearly see how more per hectare or head was causing a decline in the real price of agricultural commodities. It was about two percent per annum and it mirrored a similar increase in ‘productivity’; farmers were producing more and being paid less. They were being a little too successful at feeding a population, growing as it was.

As output prices fell, farmers produced yet more. They adopted more technology to do so. Farm incomes were in decline but it was the start of the happy times for those who supplied farm inputs.

At the other end of the supply chain, we were witnessing the rise of the supermarkets. Faced with abundance, the power was with their buyers. As early as 25 years ago we were warning farmers that they needed to become more market focused but, alas, they chose to grow yet more. It was easier to focus within one’s own farm gate and to leave the adding of value and the retailing to others. A few farmer-owned entities around Europe managed to hold their own but the 1990s and the Noughties saw farmers lose their power within the supply chains. The lucky farmers were those who had visionary representation and leadership but it was unfortunately all too rare.

As farming lost its influence within the food supply chain, it became noticeable that few outside of farming were interested in farming as an investment. Those in the finance world knew a long-term price decline when they saw it. Farming was the sunset industry as the dot-coms emerged. Property also offered far simpler, faster and greater returns.

It took the combination of a rare upturn in food prices combined with the global property price collapse in the late Noughties to change the City’s perception of agriculture. The finance world first, unfortunately, chose to dabble big time in sovereign bonds but they eventually cottoned on that food was the new gold, nobody was making any more land and the global population was going to grow ever greater.

Did these new investors in food production even understand ‘farming’ as they brought an over-simplified approach to the business. It was about acquiring land for its inevitable capital gain, using simple, near-to-mono-culture farming systems and parachuting in the knowledge required. The human resources needed were abundant, albeit that they might have to migrate, and, frankly, nobody needed much training; after all peasants are farmers so there cannot be much to it.

Hence, we are now at a point where little trading power lies with the family farm. It is about corporate profits before and after the farm gate and from ‘industrial agriculture’. The ‘family farmer’ has been reduced to be a minion to serve others; squeezed at either end and out-competed by the scale of ‘industrial agriculture’. It is becoming evident that the latter rarely pays the full cost of the resources it uses or for the externalities that it creates, but that is a story for another day.

Farmers have chased their tails for decades to provide an abundance and, consequentially, seen themselves become of little concern to an increasingly corpulent food consumer. And the consumers who do care where their food comes from have moved on to issues like food production’s environmental footprint. And one could even suggest that animal welfare is now of greater importance than the welfare of those who labour to produce our food.

Far from being appreciated for working through the toughest of conditions to feed an increasingly urban population, farmers are viewed as those who are destroying our environment. For years they have strove to produce more; albeit few of us ever appreciated the full extent of the externalities that would come with doing so. Mitigating them is now our greatest farming challenge. Just how many among our C21st population realize that without the farmers’ successes, they would still be spending a large proportion of their income on food? It was this that allowed the consumption boom, the growth in property markets and the rise in living standards. In contrast, the farmer who started off driving the band wagon, was relegated to the back seat and then thrown in the boot as others realized that there was money to be made from food; it was just not to reward the farmer.

For how much longer will we find volunteers to provide the farming cog for our food systems? Nowadays, others derive the rewards from what the farmer produces; albeit they still expect the farmer to provide so much of the supply-chain’s capital. The pressures on farming are such that the industry’s demographics are increasingly fragile. Can family farming, a model that has served us well for centuries, be fully replaced by a corporate-owned industrial agriculture that places profits first?

Will industrial agriculture ever even produce the required profits in marginal regions and where property ownership rebuffs its scaling up? Will businesses monitored by accountants, managed by executives and staffed by the less willing to deliver a resilient food system through thick and thin? Will it ever be dynamic and innovative enough to address the challenges ahead of us, not least when the industrialization of agriculture is at the core of many of the problems we face? I think not.

To lose family farming is to break the vital link between food production and the farmers love of the land, their animals and their way of life? Ultimately, the foundation of a resilient food system are resilient people who are willing to face up to whatever challenges are thrown at them; and there will be many, be they climatic or otherwise. Although we may be told that it is the agri-food industry that feeds the world, it does not, feeding the world will remain the bailiwick of the farming family which is connected to its own land. To think otherwise is folly.

IT IS TIME TO RESET THE ENVIRONMENTAL AGENDA

This post first appeared online at http://www.thatsfarming.com on the 6th October 2017

In recent days another report emerged about methane emissions from livestock. Cue, a vocal response from the environmental lobby. Before that a more specific report concerning the declining state of Irish rivers. Cue, a vocal response from the environmental lobby. Then we had another about the impact of herbicides used to control rushes on drinking water quality…

If you a farmer none of this makes great reading or listening. If like so many, you also consider yourself an environmentally-aware farmer, it is worse. Some may portray farmers in general as climate-change deniers, and there may be a few around, but they are probably far from a majority. What is, however, more common place is worried farmers who daily read and hear about others demanding that they change their ways.

Farmers are being told that they are in the wrong but not how they can change for the better. They are also aware that change means extra cost and additional costs do not bare well on an often too fragile bottom line. Very, very few are the profit-driven agribusinesses that some like to portray, they are family farms where the aim is to provide a decent living for the household, nothing more.

Whilst following and communicating with those from the ‘green’ lobby, I also follow many environmentally aware farmers. There are those who recognize the need for change and are actively working out ways to do it. They are changing their farming systems and, often, creating products around those changes and finding ways to deliver the complete package to the aware consumer. It is happening, but it is happening outside the mainstream; and therein lies the problem.

We have reached the point where we need to move on from highlighting the problems, that is the easy part, to identifying solutions and working out how to implement them. We need clear cut planning. And to start with we must clarify what the objectives are.

The environmental lobby are highlighting the big picture; that we need to reduce GHG emissions, albeit too often in the context of gross and not net emissions; largely because the accounting and science has not yet caught up with the reality of carbon cycles and sequestration. To the list we can add; cleaning up our rivers, ditto our water supplies, reversing the dramatic decline in farmland biodiversity and, especially, the vital to our food-security, pollinators.  We now need the detailed targets to aim for.

What should those targets encompass. How about, just for starters:

lower nitrogen usage to reduce emissions, run-off and fossil-fuel use [in fertilizer production]

raise sward diversity to maintain productivity with less N and to enhance grassland biodiversity

improve the farmland environment to help reinstate flora and fauna and, especially, pollinators

create income-effective upland farming systems that also effectively manage water catchments

reduce animal farming’s dependence on liquid-manure housing systems and all that they entail

develop on-farm energy generation and storage solutions so farms can be energy independent

find husbandry-based methods to support solutions where efficacy is threatened by resistance

minimize the usage of antibiotics in farming to preserve their availability in human health care

Do not let anyone suggest that dealing with the abundance of problems facing our food production systems, and hence, our farmers is not hugely complex. It is certainly not fully appreciated by those who demand change. Once we have identified and agreed where we all want to go, there is also the equally complicated issue of how to provide transitionary support to the farming sector to encourage and facilitate the necessary change. Objectives, policies and mechanisms are all needed.

And last, but not least, we must work out how to deliver all the above whilst enhancing the future of those who produce our food and manage our landscapes and our rural communities.

This is no small undertaking and it can only be achieved by the farming and food and ‘green’ communities getting onto the same page. We need to have a farming/food/environmental/rural policy for Ireland that begins with an agreed set of objectives. Frankly, what we have at present does not fit the bill. We must start again but that is going to take time, energy and cost. We must stop dissipating our collective resources on fighting with each other, it is a waste. They need to be channelled into finding a way forwards. The unacceptable alternative is to continue to bicker and to regress, remorselessly.

 

SEPARATING THE MILK FROM RURAL EMPLOYMENT

This post first appeared online at http://www.thatsfarming.com on the 15th September 2017

Last week saw the opening of a new milk dryer; it would provide economies of scale and strengthen the capacity of the co-operative to supply ingredients. What caught my eye, however, was the celebration of the 80-odd new jobs that it would create. Is it a reason to celebrate?

Typically, a milk dryer needs a staff of about fifty people. As they require the centralization of hundreds of millions of litres of milk, they inevitably create a few more jobs in the haulage sector. The presence of the new dryer should also enhance the economic future of the milk suppliers.

This is not the first new dryer in Ireland to be commissioned in the immediate past. Indeed, much of Ireland’s post-quota, expansion-milk has been dried. We should now begin to see the success of these investments reflected in the farm-gate milk price.

The milk processors ability to deliver a farm-gate price that can sustain its suppliers will depend on its product mix. How much will be sold as finished products and how much will be ingredients for others to convert into consumer-facing, branded products?

Infant formula is so often cited as a flagship product for the Irish dairy industry. Is it really such or is it a formulated product manufactured in Ireland that needs ingredients from multiple countries? Finally, from judging by recent press articles, it is at last being realized that its production, sales and branding is controlled by a handful of multi-nationals. The co-operatives owned by Irish farmers produce some of the ingredients but the profits go elsewhere in the supply chain.

Just how much does the major growth in infant formula exports to China benefit farmers? If one scratches the surface, one would probably find examples across a myriad of food businesses; the Irish dairy farmer does the heavy lifting whilst others take the cream from their milk.

Given the recent massive investment in expanding milk production and processing the additional milk, this is now the de facto position. What is done is done, the money is spent and dairy farmers and their co-operatives are committed to a course of action.

When dairy expansion was advocated, we were told that it would create employment. It does appear to be creating a demand for milkers, but few seem to want to provide their labour, at least at the salaries offered. In a functioning labour market, pay should now rise to bring labour into the sector. That of course assumes that a labour shortage creates a milk shortage and a milk price. That is not happening; thus, leaving the individual farmer to work harder to fill the shortfall. It is an inevitable consequence of the supply-driven rather than market led expansion model chosen.

With an emphasis on milk for milk powders Ireland has chosen to follow a New Zealand approach that has been effective for NZ during the Chinese-market expansion years. It was facilitated by NZ’s trade agreement with China.

To compare the prime numbers in NZ’s South Island expansion regions of Canterbury and Southland with Ireland is a sobering exercise. At is simplest, the average herd size is around 800 cows in Canterbury and 600 Southland. That is around 8-10 times greater than Ireland. Labour productivity in the NZ regions is around 180 cows per person, probably about three times that in Ireland. Hence, beyond grass, where was the logic in entering the same commodity markets as New Zealand?

A novel key performance indicator to consider is the milk processed per person employed in processing. For Canterbury, it was 3,500,000 litres rising to 3,900,000 in Southland. From a rural employment perspective, milk dryers are not exactly great creators of rural jobs! In the European artisan sector, one could probably find jobs that require a fiftieth of a differentiated milk type. It will be the same in Ireland, 80-plus jobs are not a massive return for the milk processed or, for that matter, the investment made. If you are wanting to highlight job creation, don’t dry milk.

The rural population density in South Island is about a 1/10th of that in Ireland and in Southland a lot less than that so are milk-processing jobs vital sources of rural employment in NZ? One could argue that given the response to Ireland’s current need for milkers, there is full employment in rural Ireland but one suspects not. Maybe it is that dairy expansion is creating the wrong jobs?

Hence, should we have been focusing on creating rural jobs in milk processing rather than in the milking parlour? Should we have been focusing on value-added and higher-value as opposed to more milk for centralized and automated processing? Should we have been focusing on maximising the farm-gate value of milk, lowering the volume needed for viability, and thus reducing and not increasing the pressure on those doing the milking? The current situation suggests that we need a farming and processing system that needs less milkers, not more.

Rural Ireland needs jobs and its family farms need off-farm income and we need to take a long hard look at whether these should not actually be coming from milk and food processing. Maybe we will discover that they are no more attractive occupations than milking, but we should find out.

It is a radical suggestion given that local processing will mean different products and alterations to the milk supply side, but it is one that needs investigating. The alternative is just to accept that the future of Ireland family-owned dairy farms is entirely tied to the milk for milk powder strategy; an approach that will also not provide many wider benefits to the country’s rural communities.

FROM THE CONSUMER’S FORK TO THE FARM-GATE PRICE

This post first appeared online at http://www.thatsfarming.com on the 8th September 2017

If the consumer pays a premium price for the final product who gains? Where in the supply-chain is the value added? Is it attributable to using higher-quality raw materials and is the raw-material supplier properly rewarded? These questions are frequently asked by Irish farmers, their representatives and the farming press, albeit rarely explicitly so. But how often is a thorough investigation done to ensure that the farmer is properly rewarded?

Farmers believe that whilst they produce the best beef cattle around they do not get properly rewarded. Only this week, Irish butter, that is seen as best in class in Ireland, is selling at a lower price than others. Some are inferring that others are gaining at the farmers’ expense.

Farmers must, however, ask if the end consumer can identify the origins of the final product and do those origins premiumize the product? If they do, why is the added value not transmitted back down the supply-chain? Of course, no traceability of that value added means no farm-gate premium.

The grey area is with industry wide ‘marketing’ schemes. If everyone is certified as having a particular attribute nobody is visibly rewarded price wise in comparison to their neighbour. It is what happens with the quality assurance schemes; they are about market access for most if not quite all Irish produce and they support the broader competitive position. They do not confer a visible premium; something that is now understood, even if reluctantly so, by farmers.

A priority must be to develop products that add value to what is produced on farm and, hence, to premiumize the farm-gate price. Invariably, this means changing on-farm practices. The most obvious example is to operate a certified-as-organic farming system where the produce is identifiable and a premium farm-gate price paid.

The Angus and Hereford beef breed schemes provide another example. They offer a price premium for producing beef sired by breed-registered bulls. Doing so does mean some farming system change. Nonetheless, as the schemes certify sire-only beef, there is little to constrain supply volumes with the result that abundant supply can soon erode premiums. With no farmer control over the supply side within the scheme, the benefits of any retail premium may end up elsewhere.

Recently there has been the approval by the USDA of the Irish grass-fed beef label for use in the US market. It was needed given that a grass-fed definition was already in operation states-side. The parameters for Irish grass-fed beef include: the diet must be more than 80% from grass, the beef is traceable from farm to fork, it is from QA farms, minimum annual grazing period are adhered to, the cattle are raised on family farms and reared without the use of growth hormones. From an Irish beef sales-into-the-USA perspective, this is a significant step forward.

In the interests of transparency though it should be noted that A Greener World which certifies Grass-fed Beef in North America is demanding that the USDA requires labels to clearly specify that it is only 80% grass-fed as existing US labels demand 100% grass-fed and 100% outdoor raised.

From an Irish farming perspective, is the advent of the new Irish grass-fed beef label going to lead to a farm-gate premium for those who supply the beef? Or is the reality that so much Irish beef will qualify under the given criteria that there will, effectively, be no supply constraints and no need for processors to pay a premium? Was the label about selling more Irish beef per se, or was it about designing a designated-origin system from the ground up? Is it a scheme that farmers have to qualify for? Does it have transparent links from fork to farm and the mechanisms to transfer premium consumer-paid prices through to the farmer? The latter is what the Irish beef farmer needs.

Without doubt, Irish meat and milk does come from cattle and sheep that obtain most of their nutrition from grass. Glanbia Ingredients Ireland highlights this with its Truly Grass Fed™ label. Do their milk suppliers gain a premium from supplying the milk for the label or does it provide all suppliers with a higher price than they would otherwise get?

To quote from http://www.trulygrassfed.com: “Truly Grass Fed milk comes from 4,800 farms located in Ireland’s most fertile land. Each farm has an average of 80 cows on approximately 150 acres, which is only about one cow for every two acres. 
Now that’s what we call room to roam… Truly Grass Fed cows dine on a diet of at least 95% grass with a little added clover for nutrition”.

I recently asked if Ireland’s livestock industry should go GMO-free given the cost implications of sourcing and certification. If the farming industry makes such a choice one would expect that farmers would only do so knowing that it would reward them with a farm-gate price premium. It may, therefore, come as a surprise to know that GII is already on the ball and that it already has certified GMO-free status in place. Clearly some in Ireland do recognize the market opportunity that is GMO-free. Do their milk suppliers receive a farm-gate premium for being the foundations of a GMO-free supply chain?

To quote again from the same source: “A core element of the Truly Grass Fed™ offer is non-GMO and we’re now delighted to announce that the products offered under our Truly Grass Fed™ range have been verified by the Non-GMO Project… The Non-GMO Project is a US based non-profit organization committed to preserving and building sources of non-GMO products, educating consumers, and providing verified non-GMO choices. It is North America’s most trusted seal for GMO avoidance for consumers who are concerned about what’s in their food.”

Firstly, is there a separate milk collection system for such milk? Secondly, do milk suppliers have to jump through hoops to supply a scheme? As far as one can see from the website, it applies to all 4800 milk suppliers. Hence, if everyone is involved, everyone benefits from the premium generated by having GMO-free certification. In theory, this is a positive move that responds to a market evolution but will it deliver the full benefits of being GMO-free to the farmer? It is after all they who are operating the farming systems that are GMO-free as per the rules of the certifying body.

As laudable as these schemes are in raising the collective bar, and they show that some are fully aware of the market potential of fully portraying the Irish family farms and their mainly grass-based farming, further schemes must be developed whereby there is an enhanced link between the product’s market-place characteristics and the farm-gate price. Schemes need to be designed from the ground up and in such a way that they deliver a clear market-derived premium to the farmer via an enhanced farm-gate price. Their design must have farmer input and there must be significant farmer control of the schemes and the volumes approved by them. If it is the farmers actions taken on farm that add value, the rewards must go back to the farm. We are very good at talking about farm to fork, but for the farmer it is the reverse that really counts, it is about from fork to farm.