It is fascinating to read in the IFJ a little about what Bord Bia presented to the Beef Forum last week. It was a variation of former comparative analysis of cattle prices in Ireland and in its main export prices. I then went to my spread sheets which I had set up to do a spot check on retail prices in the UK supermarkets to see if I could get an idea of the retail price comparisons between equivalent British beef products and Irish beef products. Ultimately it is the final retail price [and the price for other final market destinations] that matters as it is these prices that [should] translate through the supply chain to the farmer [one assumes that the processing cost of carcasses is unaffected by origin].
The different market analyses highlighted a major difference in approach. I am interested in the actual final market whereas others are focusing on cattle prices and then ignoring where the beef is ultimately destined for. It is the latter that counts.
It is actually very difficult to get a clear idea of what the British/Irish price differential is because there are so very few clearly marked Irish beef products in the UK fresh-beef market [less than 0.5% when I did my spot check – yes, that is one-half] so one is trying to compare products that are definitely of British with ones that may be Irish [at a guess the British premium is likely to be of the order of 10%, maybe a little more]. Comparing quality cuts [i.e. steaks] and beef in the supermarkets premium lines is much easier; simply Irish has ceased to exist in the market.
A famous name in the Irish beef industry said a few months back something along the lines that; ‘Irish beef is treated as a filler by the UK retailers when British beef is not available’. Shock, horror in Ireland and retractions from all concerned but two words do spring to mind; ‘bag’ and ‘cat’. It appears that an accidental fore-warning has been ignored because a look at the retail shelves seems to provide ample testimony to this situation. ‘British’ has been on the rise for a number of years but more recently has ‘horse-gate’ given it the one final push in the supermarkets that has seen ‘Irish’ marginalized across the retail sector and ousted it completely from the premium retail sector?
It would be interested to ‘rebuild’ a carcass of Irish origin and another one of British origin destined for Tesco, Asda or Sainsbury to see what the retail sales income for each looked like [although one may find that they are not selling premium cuts of Irish origin]. One should also note that at the top end of the UK market, Waitrose is exclusively British and , I suspect, the same goes many quality-orientated independent butchers [who want to sell ‘local’]. On a similar line of thinking, I recently coined the phrase ‘reverse traceability’ and suggested that this may just be a good idea as tracing the destination of a few carcasses [albeit that in the end it would be their components] would offer both transparency and indicate to farmers exactly where their so-carefully reared prime cattle were going to. The results would be fascinating.
In the meantime and before any real in-depth market analysis is done, what does this say?
I would expect that analysis would show that there is a significant end-market differential between British and Irish beef and that this will translate through the supply-chain to cattle prices. That I am afraid is certainly not what Irish beef farmers or their representatives want to hear. But then they should want to read and hear the findings of proper market analysis as that is what their real world is about. And then do not shoot the messenger.
If we then knew a little more about the market detail we would have a clearer idea of whether the problem in Ireland lies with the profiteering of the country’s processing oligopoly or Irish beef’s declining, or already declined, position in its main export market. Simply, it is difficult to find a solution for a problem until the problem is first recognized and accepted as such.
If it is indeed the latter, then Irish beef farmer can then start to focus on how to improve their lot undistracted by others around them trying to avoid carrying the buck for not having seen the market changes coming and reacting to them so as not to leave the farmer paying the price.
Ultimately, as I have said before, for many of Ireland’s, traditional beef farmers it is be about selling premium beef to premium international markets populated by consumers willing to pay a premium price. To do that, however, they have to ask themselves whether they currently have right routes to markets in place to allow it to happen and, if they do not, the issue then becomes one of what are they going to do about it.