Category Archives: Ireland’s dairy sector

DAIRY’S EXPANSIONIST RHETORIC APPEARS TO BE BACK

This post first appeared online at http://www.thatsfarming.com on the 27th November 2017

Reading the press, one notices that we are again being regaled with more about dairy expansion.

Now I have no objections to expansion per se, if it is done in the right way, for the right reasons and fully considers all the factors that will impinge on such an investment decision going forwards.

I do not, however, agree with expansion when expansion is undertaken primarily to compensate for low farm-gate prices. Of course, in certain locations, scale can provide the solution, but Ireland is not one of them. It is a small country with a difficult climate and has major constraints in terms of land accessibility. I am greatly concerned that the upward trend in milk production is not because of the inherent profitability of the sector but due to farmers trying to compensate for poor milk prices by expanding. And since April 2015, there have not been very many months where the milk price has covered the full costs of milk production. In such a farm-gate-price environment, expanding to mitigate market price shortfalls can only go so far before the wheels fall off the cart.

Following a similar line of thinking, switching to dairy from beef or tillage because the latter are unprofitable is not a reason to move into dairying. As with dairy farming itself, a part of these sector’s problem stem from an inherent lack of production scale. Elsewhere, this small scale is compensated for by focusing on high-value markets whereas in Ireland a lack of suitable routes to markets to the right consumers inhibits the implementation of such a compensatory strategy.

Hence with my over 30 years of experience of farm business planning and investment analysis, rather than write a lengthy discourse about the pros and cons of expansion, I thought I would just list a few of the many questions I would ask someone who was considering investing in dairying.

The available route to market options

  • What is the market focus and product mix of the processors who can purchase your milk?
  • Will the processors be able to add value and, if so, are they structured to pass on the benefit?
  • Are the processors able to pay their suppliers an attractive milk price from sales revenues alone?
  • Can you establish a past track record of the milk price, the seasonality and stability that your route to market options have delivered? Can this be predicted for the next few years?
  • Have you established downside price scenarios and evaluated their cashflow implications?
  • Is the structure of the processor and its milk suppliers competitive within the markets it supplies?
  • Will the processor have to change its product mix to meet market changes in the medium-term?
  • Are you willing to accept the rigours of year-around-milking if that becomes necessary to supply milk into a higher-value, more rewarding, consumer-products-focused supply chain?
  • Can you relatively easily change milk processor if it fails to deliver the milk price that you need?
  • If the routes to market available to you fail to deliver for your business, do you have a Plan B?

The constraints on the farming business

  • Within the context of the land and farming resources available, are you able to create a business of sufficient scale to be competitive within the overall market chosen by your milk processor?
  • Farm land is usually a major constraint. Can it be accessed at realistic and competitive prices?
  • Are you able to operate with a common-sense buffer for grazing and forage and slurry storage?
  • Will labour availability impact upon your chosen business model? Will the business be able to sustain the employment of third parties to enable you to manage your work/lifestyle balance?
  • What is the possibility that constraints will be placed on the business by legislation relating to GHG emissions, nitrate seepage and animal welfare within the next decade?
  • Will you be able to invest to mitigate the consequences of such constraints? If not, will the farm business remain viable in an imposed-change operating format?
  • Have you been able to obtain totally independent, experience and qualified investment advice?
  • Is your family willing to provide the finance to maintain the farm through any bad times ahead?
  • If loan finance is required to fund the investment and the farm, land and, possibly, the house has to be offered as collateral, do you fully appreciate that these will be imperiled by loan default?
  • And the toughest question of all; are you considering dairying because you do not know how else to utilize your land? Should you be considering leaving farming altogether?

 

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CHERRY PICKING CAN YIELD A BITTER HARVEST

This post first appeared online at http://www.thatsfarming.com on the 23rd August 2017

When I started delving into the Irish agri-food industry, an early finding was a preference for focusing on partial farm-production costs. For some reason which, in my less cynical moments, I put down to an academic desire to compare one farm with another or one national industry with another, like with like, all the talk was about how low Ireland’s direct production costs were. Of course, if you wish to go around promoting the idea that Ireland is a World-leading, low-cost producer of milk, it is the go-to data, it provides some great rallying calls and media copy.

Thankfully, but very belatedly, there is now some effort being made to disseminate more in-depth economic data on the costs of production by including an imputed cost for the farmer’s own labour; hitherto something that was left out of the equation, presumably because every farm is different, or so we like to think. Sadly, the partial cost approach did not just exclude family labour, the major labour source in Ireland, it also ignored the costs of land and capital for the same reason.

It is not as if full-costings had not been done. Farm business survey work is routine across the EU and, in Ireland, sporadic surveys are done into the international competitiveness of Ireland’s dairy farming. In a nut shell, the latter highlight that Ireland has low direct costs per litre of milk but also that this advantage was negated when all labour, land and capital costs were factored in. It is only when farms are significantly above average size, that Irish dairy farms are internationally competitive, all costs considered. My own calculations concur with this.

So, were those promoting an expansionist agenda for the dairy sector guilty of cherry picking their data sources? Or was it just the desire to be positive and promote a best in the world image? That is a judgement that I will leave to others as I, as a blow-in, could not possibly comment.

What prompted me to return to my partial costing hobby horse was the recent highlighting of dairy-sector labour shortages. I have read about the pilot scheme to incentive the unemployed to milk cows and proposals that the Government should provide milking visas to non-EU nationals and create a Sunday-off relief-milking scheme to lessen the work load. I am still awaiting to hear that convicted criminals will be sentenced to years of hard milking.

It is, of course, not a subject to jest about as milking every day, usually twice a day, is a tough way to make a living. It is relentless and farmers need to be able to take a break from the milking routine. To do so means incurring relief milking costs and they are costs come higher at weekends when, not atypically, the second [or primary] income earner in the farm household gets time away from work. This a just one reason why labour planning is such an essential part of farm business planning. It is no less vital to understanding your industry than the variable costs of growing grass.

A few of my farming correspondents have, rightfully, pointed the finger at the pivotal problem, the farm economics. It has been exacerbated recently by a low milk price. Nonetheless, the question is, when is the labour shortage going to be resolved in the only way it truly can be, by farmers being able to afford to reward people with an attractive enough payment to incentivise them to want to milk cows? Is it going to happen at 30cpl, at 35cpl or maybe at 40cpl?

The tragedy in this is that potential labour issues should have been analysed and factored in before rapid post-quota expansion was mooted as the way forward for the dairy industry. Likewise, for land and capital. I would also add to that list demand and supply-side market analysis but that is a story for another day. Full, in-depth analysis would almost certainly have contradicted the we are globally-competitive, low-cost milk producer mantra and brought into question the headlong rush to follow the New Zealand model, be it in milk production, milk processing or market focus. Full-cost economic analysis would have shown that the farm-scale differential would mean that following New Zealand’s approach would not create a sustainable Irish milk-production sector.

One likes to be positive, but finding sustainable solutions for the Ireland’s dairy sector labour shortage is going to be difficult. It is because the problem goes beyond finding the willing and able; it is about having invested magnificently in targeting markets that are unlikely to yield the farm-gate milk price that will make the economics of milk good enough to pay sufficient money to attract the needed staff. It is one hell of a conundrum. And as with so much with the way farming is evolving these days, the consequences will fall hard on the farmer. And that would, probably, never have happened if there had not been so much data cherry-picking in the first place.

 

A Centre of Excellence for Quality-Indicated Products

Ireland desires to be a ‘food island’ but for a country with such aspirations it has woefully few European Union- registered designated-origin products. It may appear to be an anomaly but it is a well-founded one as the Irish agri-food industry apparently believes that premium products are created within a factory environment from farm-produced raw materials. An approach that simply restricts the premiumization of the product. Its products can be clever but they will never be recognized alongside the premium products of, say, France and Italy.

The rationale behind the establishment of The Centre of Excellence for Quality-Indicated Products [CEQUIP] is that for Ireland to make the transition to a premium-products food producer, it must first create the products that can achieve high market status. Traceability, in terms of origin and production methods, is absolutely critical. It must, however, go far beyond auditing farms; it must change both production and processing practices.

The products CEQUIP will work with will have their roots in the soil. In France, the highest quality products come from their ‘terroir’ and it is a characteristic that will be required of any food product from anywhere which aspires to being recognized as premium. Good food products may originate from within the factory environment and be manufactured using ‘ingredients’ but premium products will have origins traceable back to the land.

On a similar note, we live in times where ‘innovation’ is the buzz word in the food industry. It is being thrust upon the farming industry as incomes decline and further adoption of ‘technology’ is advocated as the solution. We, however, question whether the technologies of the last half a century have really delivered enhanced incomes to farm households and rural communities. In this light, whilst appreciating that innovation and technology has a role in farming and food production, innovation must be about creating products that are firmly linked to farming practices and produced within the local community. It may be considered ‘retro’ thinking but so be it.

This initiative comes at a time when farm incomes lurch from one crisis to another. It also comes at a time when the farming to food industry is being asked to minimize its impact upon the climate and our natural resources. Amongst the latter are the animals we rear and manage. Thankfully soil health and fertility is rising the agenda fast but we still overlook the welfare of our very food producers and the communities in which they live. We must produce food in fashion that rewards farmers for their time and effort and the use of the assets they own.

The objective of CEQUIP is to address the issues surrounding today’s food production. It may appear to focus on premium products for wealthy people but that is rationalized by saying that Ireland is characterized by small-scale, family-farming-based food producers working in a high-cost economy.  That said, the focus of CEQUIP is to encourage the production of high-quality, nutritious foods that are produced in a way that has a minimal impact upon the Planet and its finite resources. By some, we may be criticised for promoting farming practices that are seen as contradictory to this aim but we believe that those behind CEQUIP are at the forefront of a new agricultural revolution that will deliver both food security and climate-change mitigation.

For several years, we have researched the various designated-origin schemes used around Europe and further afield. Whilst we are aware of the official EU schemes, we do not feel that it is necessary to seek such recognition in the first instance. We consider that it is better to design and implement our own schemes first and only when they are well established to apply, if appropriate, for official recognition. This will allow greater flexibility at the design stage and allow the development of Irish solutions for Irish farming and food situations. It is also not just about developing Protected Geographic Indicators, it is about developing more in-depth schemes that go well beyond locality to include specific farming husbandry practices and food processing techniques. For these we will be investigating the way these are done in countries like France, Italy, Austria, Spain, the UK and the USA. Our plan is to now start by developing a multi-tiered, quality and origin scheme for suckler-reared Irish beef.

IRELAND’S FAILURE TO DOMESTICATE THE UK FOOD MARKET

As I was writing about Brexit earlier, I was thinking upon the position that Irish farmers now find themselves in. Elsewhere I have said that it is the single most important issue facing Irish farming since the Emergency [that is World War Two for readers outside of Ireland]. I have also recently read it described as the greatest challenge facing Irish farming since the Republic came into existence.

Somehow there was an inevitability about the latest crisis to hit Irish farming. If it was not Brexit it would have been triggered by a proliferation of international trade deals that exposed Irish farmers to the chill winds of free-trade. It may well happen for UK farmers post-Brexit, but at least UK farmers got to vote in the Referendum; unlike their Irish counterparts who are just being taken along for the ride.

As I stated in my earlier post ‘Post-Brexit delusions about deregulation’, I can see British farmers responding to the threat from cheaper imports by creating comprehensive unique-selling-points for their products. By so doing they will self-impose greater regulation upon themselves than what they lose from leaving the EU. It is perverse but quite probable. A major part of such a market-driven strategy will be to fully exploit ‘local’ and ‘British’. And therein is the crux of the matter for Irish farmers, they are neither ‘British’ or ‘local’; although one could argue that Wexford is closer to London than any part of Scotland.

Now, for historical reasons, I know the UK food markets reasonably well. I was taught at College to walk the food aisles and have been doing so ever since. And as I have alluded to frequently, I am shocked by how poor the presence of Irish produce is. As far as consumer-facing, visibly-Irish products go, Ireland is a one trick pony, Kerrygold butter. Yes, Ornua controls a major cheese brand in Pilgrims’ Choice but you would have to be knowledgeable to know that it is Irish.

As for Irish beef, it is only in three supermarkets [Asda, Sainsbury and Tesco] and even then, it fills the ‘budget’ and ‘standard’ shelves. Again, as I have said before, Irish beef finds its way into mince, meatballs and burgers. It is not the premium, grass-fed product that Irish farmers envisage or expect. They frequently send well-reared stock off to the factories that grade well. They are also likely to quality assured. And they end up on the bottom shelves of UK supermarkets or in burgers served up by the burger chains. If one is at the foundations of such a food chain, can one really expect to receive a premium price? And if you are so positioned, far better that you are a low-cost Brazilian rancher than a small-scale, Irish family farm.

Just why has Ireland ended up in such a weak market position in the UK? It is after all Ireland’s major market and it is one that it is highly dependent on; a fact that it will not be able to change in a short space of time before and after the reality of Brexit. With such a dependency, it is truly shocking that the country has allowed its food products to become [Kerrygold apart] nearly invisible in the UK. It is a marketing failure of truly awesome proportions.

One can probably find rational explanations for such a situation. Possibly the supermarkets have not wanted to promote Irish beef [after all British beef holds something of a special place in the minds of UK consumers similar to ‘English strawberries’]. Has the status quo been perfectly acceptable to the factories? Has it suited them to operate a simplified high-throughput, low-margin-per-head model; not least in the face of a supply base that offers them a far from homogenous raw material. They must also deal with the purchasing weight of the few buyers from the retailers and burger chains. And as for cheese, maybe it is a sound strategic choice not to put Irish front and centre when it comes to promoting Irish-origin cheddar in the UK. All of them are interesting explanations but they all leave the Irish farmer devilishly exposed to what Brexit might well usher in.

What I cannot understand is how so little has been done to develop Irish products for the UK markets. And by that, I mean products that would have created a following and a brand loyalty that goes beyond the UK-living Irish community. France does it, Italy does it, and others do it. In my childhood years, New Zealand Anchor butter was iconic [and how NZ must now regret having sold off the rights to use the Anchor brand to Arla Foods] and NZ lamb had a great reputation’ Likewise Argentina for its beef. And the owners of the Dewhurst chain of high-street butchers were ranching and processing across South America. They even owned the Blue Star Line to ship their beef back to the UK. And then as now, if you wanted cheese, you thought of France. Why then did the development of Irish products stall after Kerrygold?

The lack of recognized products and brands is now going to make dealing with Brexit that much more difficult for the Irish farming industry. Just how much easier would it have been if the UK consumer has developed an affinity over the years for an array of Irish food products? Due to location alone, British consumer should be thinking that Irish is not British but it is local and it is produced to standards that are clearly akin to those employed by Britain’s own farming industry. Food miles are obviously lower and there is a strong, untold story about Irish family farms and rural Ireland. The story is there but the book remains unpublished. And sadly, when it is, where are the products to accompany the marketing story? This is, and it should be recognized as one of the great mysteries of food marketing; just how did the Irish fail to ‘domesticate’ the UK market?

THE OTHER CLIMATE-CHANGE THREAT TO IRISH FARMING

In what I expect to be a fast-moving food world in the coming decade, thinking creatively is critical. On the other hand, a prevailing ‘group think’ may be highly destructive.

I am closely watching the evolving debate over climate change and cattle farming; not least because cattle have been branded using emissions-based assessments of food production as the arch criminal. In recent weeks, I have written three posts on the subject: ‘Are some cows now more equal than others?’, ‘Let us all just blame the poor old cow’ and ‘Climate change – thinking beyond the emissions’. It may be wishful, but I think I am beginning to see an awareness that not all cows [cattle-farming systems] are equal when it comes to climate change.

Ireland sees itself as a front runner in low carbon-footprint farming. The country’s mainly grass-based systems have conferred an advantage that places its emissions per unit of beef or milk as some of the lowest around. It is seeking to reduce this further through increasing the productive efficiency of its beef and dairy farming. The term ‘sustainable’ is a core part of how the country projects a green image to the World.

So, Ireland is a first mover when it comes to reducing carbon emissions from its agriculture. Is there, nevertheless, a disadvantage from being a leader when the knowledge base is still evolving? So far it is all about emissions and reducing those is a strategic [and marketing] focus of the Irish agri-food industry. The question is; will it be about emissions per se or will it become about net emissions? It may happen once cattle and pasture management is fully recognized as the key to lowering atmospheric carbon levels and reversing climate change.

If this is going to be the case, will the environmental champions be those who are deploying pasture management systems that sequester most carbon? Will it be about zero or negative carbon emission production? And will this later entry to the green field surpass Ireland’s efficiency-focused approach to beef and milk production? Not least if one considers Ireland’s reliance on imported nitrogen fertilizers, less than biodiverse swards and its infrequent use of clovers [let alone other legumes]. Some in Ireland may consider that the country is currently a leader in ‘sustainable’, low-emissions livestock farming but it must not rest on its laurels.

This is also a marketing issue as much of what I read emanates from the USA; oft seen as a key premium export market. The USA already has a clear definition of what is ‘grass-fed’. It must be forage-based and reared outdoors all year [traditional ranching]. It is about marketing because Ireland must produce the product to meet the rules. It cannot operate its usual produce-it-first-and-label-it-second, supply-driven approach. As consumer awareness of the role of pasture management in restoring North America’s historical grasslands grows, one can see that selling loosely labelled as ‘grass-fed’ products will become harder in the USA, not easier.

An interesting point that I frequently come across is that some of the atmospheric carbon rise has been due to tillage farming. Over the last 150 years or so carbon has been released from grasslands that have been ploughed for cropping. One also reads about how dramatically soil organic matter levels have fallen in arable [often former grasslands] soils from on-going tillage farming. Is this, along with fossil fuel burning, the primary cause of rises in atmospheric carbon?

From what one reads one could be forgiven for thinking that it is all down to cattle. In terms of the total atmospheric carbon increase, cattle may not be the victims of an injustice. Their role may be far less than we have been told and they may have only played a part since we stopped grazing cattle and started keeping them in feed lots and feeding them grain.

There is another potential unforeseen consequence for Ireland in the above.

What if returning carbon to arable soils becomes the climate-change solution?

And what if this happens in tandem with using cattle to restore arid grasslands?

And will the green ‘brownie’ points go to those who farm to sequester carbon?

Importantly, what will the consumer perceive to be ‘green’ and ‘sustainable’? We could have a new set of rules. Ireland’s tweaking of its farming systems may then be in sufficient to win over the consumer. As these issues rise in significance [as I believe they will] it will take more than good salesmanship to premiumize your product with green credentials; it will require more radical farming systems changes from the bottom up.

This is a consumer-facing issue. It is about who wins market share in the premium ‘ethical’ markets. It is, nevertheless, not the whole story. Just what will happen to the supply side of beef [particularly] and dairy markets if cattle farming is reintegrated with tillage farming?

Further, what will the implications be for beef and milk production economics if society chooses to support farms that sequester carbon back into the soils whence it came? Are the French with their 4-in-a-1000 scheme already on their way down that road?

Ireland with its preponderance of grasslands may not have contributed to tillage-released carbon over the decades and, thus, it may not benefit from incentives to sequester carbon into soils to the same degree as those with significantly larger tillage areas. It may appear an unfair way of looking at the subject but then is life fair?

Ireland may now be a leader in low-emissions beef and milk production but this may not be enough to capture issues-aware markets in the future. It may have to do a whole lot more when the wider populace realizes that it must prioritize carbon sequestration and the using of pasture management to return carbon back into the World’s arable soils. Do we even have a choice?

LET US ALL JUST BLAME THE POOR OLD COW

There was a time before the days of widespread dietary guidelines where people started the day not on muesli and skimmed milk but on pig fat and onion. It was a time when a skinny latte was not even a twinkle in someone’s eye. It was an era of cooking with dripping and lard and when we made steam puddings with beef suet as nobody had even dreamt of offering a palm and sunflower-oil based vegetarian suet. It was when ice cream contained dairy fats and not palm or coconut oil. Yes, as shocking as it sounds, those days did exist.

All this began to change when it was concluded that saturated fats were bad for you. Apparently, those of animal origin were worse. The consequence was that many of us grew up being told butter was bad and margarine was good and we should select the low-fat or zero-fat dairy option whenever possible. For years, the nutritional advice was to eat less fat and to replace the energy supplied from the fats with carbohydrates. It appears that times are now changing and some of the fats are being rehabilitated. At the same time, we are beginning to ask if eating too many carbohydrates and, especially, sugar may have significant and [apparently] unforeseen health consequences. Important as this evolving and controversial story is it is not the focus of this article.

To the best of my knowledge, back in the ‘60s and ‘70s as animal fats became ‘unfashionable’ the food industry had to identify alternatives. Thus, the emergence of trans fats [(from Wikipedia): Trans fats… are a type of unsaturated fats that are uncommon in nature but became commonly produced industrially from vegetable fats for use in margarine, snack food, packaged baked goods and frying fast food starting in the 1950s… Trans fat has been shown to consistently be associated… with increased risk of coronary heart disease]. As with animal fats, trans fats eventually fell by the wayside leaving the food industry hunting around for another option to use within so very many food products. Palm oil has proven to be that alternative.

It is safe to say that two major beneficiaries of the dietary changes that have seen animal fats replaced with vegetable fats have been soybean oil and, later, palm oil. Setting the nutritional issues aside, these changes have not been totally benign from an environmental perspective. The expansion in soybean and oil palm has had consequences but ones that rarely get mentioned at a time when ruminants [especially cattle] get such a bad press from the climate change lobby [see my earlier post, ‘Are some cows now more equal than others?’].

Soybean is a major source of vegetable oil. The soybean is ‘dual-purpose’ but, historically, two-thirds of its value [ref. soymeal.org] comes from soybean cake [thus it is often referred to as a protein (for animal feed) crop]. For reference [soymeal.org], about 17.5% of the bean is extracted as oil and 80% as meal. Consequently, a greater emphasis is placed on the use of soymeal for poultry, pigs and cattle rather than oil even though soybean oil production has risen from nearly 16 million tonnes in 1990 to nearly 43 million tonnes in 2014 [FAO]. The emphasis on meal is why meat and dairy production is often seen as resource-hungry and a major problem with respect to climate change. Apart from years of nutritional advice that favoured vegetable over animal fats, animal fats are now often believed to be bad for the environment and our climate.

A great deal of importance is placed upon cattle and climate change so one would expect that most soybean meal was fed to cattle. Usage in the USA is, however, estimated as “approximately 48% of the soybean meal is used in poultry feeds followed by 26% in swine feeds, 12% in beef cattle feeds, 9% in dairy cattle feeds, 3% in fish feeds, and 2% in pet foods” [Cromwell in soymeal.org]. The figures highlight just how much soybean is actually used for poultry and pig feed.

Are the climate-change concerns about soybean meal use in cattle because they are less efficient converters of the meal into human-consumable protein than intensively-reared, confined poultry and pigs? One would of course like to see the question answered in terms of cattle that are predominately herbage-fed and those that are grain-fed [the research may be out there but the author has yet to find it]. As stated earlier, all cattle are not equal and especially if one considers their possible role in carbon-sequestration and grasslands regeneration. Meanwhile is sufficient scrutiny being placed upon pigs and poultry?

Poultry as a white meat is often promoted as the healthier option but is it, if the usage of soybean meal in the USA is typical of wider global usage, also the environmentally-friendly choice?

To quote the World Wildlife Fund [panda.org], “unfortunately, the expansion of soy to feed the world’s growing demand for meat often contributes to deforestation and the loss of other valuable ecosystems in Latin America… in South America, almost 4 million hectares of forests are destroyed every year, 2.6 million of them in Brazil alone… [it] can largely be blamed on heavily soy-dependent livestock farming… limiting consumption of animal-based food products, particularly meat, is one thing people can do to help end this devastating trend”.

To add some background, using the FAO production figures [which date back to 1961], the global area devoted to soybeans was nearly 24 million hectares in 1961. By 2014 it had risen to nearly 118 million. Over this period Argentinian production has risen from 1,000 to 19¼ million hectares, Brazil from 240,000 to 30¼ million and the USA from 11 million to over 33½ million. Therefore, one can also see that Argentina has seen a massive expansion; presumably at the expense of its Pampas grasslands rather than rainforest [and thus it does not attract the same attention]. If, however, one considers that carbon loss from grassland converted to tillage as a major source of atmospheric carbon, how great has the impact of Argentinian soybean expansion been? And is the loss of carbon-sequestering, pasture-based cattle-farming only made it worse?

Who buys soybeans or its meal? In 2013 World trade in soybeans was 103 million tonnes [USA exports accounted for 38%, Brazil 42% and Argentina 8% [the latter processes most of its beans)]. Of this nearly 60% goes to China [which processes beans rather than imports meal and oil]. Some 62 million tonnes [FAO] of soymeal was traded internationally of which nearly 25 million [40%] was imported into the EU. Argentinian exports accounted for 35% of global trade, Brazil 21% and the USA 12% [FAO]. For reference, Argentina is 100% GMO, the USA 93% and Brazil 92% [GMO Compass].

What would be interesting to know is what proportion of soymeal imported into the EU was used for poultry, pig and cattle [dairy and beef] feed. In the context of EU imports, Ireland is a relatively small importer of soymeal. In 2013 it imported about 415,000 tonnes [FAO]. By 2015 [CSO] this had risen to nearly 450,000 tonnes of which about two-thirds came from Argentina. For what is it used?

As highlighted earlier there are environmental issues around land use for soybeans in South America. For some food consumer and those in the supply-chains that provide for them there are also other issues with soya; namely the use of GMOs and the associated use of the glyphosate herbicide. Whatever farmers and scientists think about these technologies; the situation is that many consumers [often premium-paying] are concerned about their use and are willing to pay to avoid them. The question for a country like Ireland that aspires to be a premium foods producer is, does it wish to take account of these consumer preferences or not?

A while ago I read an article from the USA that asked whether Irish butter was GM-free. It may be promoted as grass-fed but is it also produced without the use of GM feeds [i.e. soybean meal]? When one reads about UK and German supermarkets looking at only stocking livestock products from animals that are fed GM-free diets, the GM-issue should be of major concern to Ireland. Is there a correlation between Ireland’s target markets for, for example, developing the Kerrygold brand and consumers who wish to eat a GM-free diet? One can believe that these consumers are poorly informed but can you create a sustainable business by ignoring the wishes of your target consumer?

To return specifically to soybean meal usage, should we be looking at our consumption of poultry meat more than we are? Chickens bred for intensive, confined systems grow at an incredible rate. Are they fuelled by protein-rich diets to do so? Are we consuming vast amounts of soymeal to feed our desire for cheap chicken-derived protein? And should we also be considering the broader issues like bird welfare and antibiotic use? If one compares chicken-based protein with that from grass-fed, largely free-range, cattle production, are we targeting the wrong protein producing systems?

Another major protein feed imported into Ireland is palm kernel extract [PKE]. This is the reside left after extracting the oil from the palm kernel. The palm kernel itself being the minor proportion of the palm fruit [from which most the palm oils is derived]. In this case PKE is the by-product of producing palm oil. Its availability has, nonetheless, increased significantly in recent years as the demand for palm oil by the food industry [as trans fats usage has declined] has risen.

In 1961 the global palm oil area was 3.5 million hectares [FAO]. By 1990 this had risen to 6.1 million hectares. It exceeded 10 million hectares by 2000 and over 18.5 million in 2014. In 1990 palm oil production was about 11½ million tonnes. By 2014 it was nearly 54½ million. Palm oil has seen a recent and dramatic increase in usage and it is one that is driven by the demand for palm oil as a vegetable-fat. It is probably the greatest development resulting from the substitution of animal fats by vegetable fats in the human diet [a consequence of decades of nutritional guidelines]. The question is, has this change been a benign one for our environment and our climate?

To say that there is concern about deforestation in regions like South-East Asia due to the expansion of oil palm is an understatement. Not only is there the carbon emissions from forest clearance itself but there are the issues of habitat loss and species extinction. There are now sustainable palm oil initiatives but are they doing more than scratching the surface? And our demand for palm oil seems to be insatiable and it has major environmental costs. Is it a cost that can be traced back to our nutritional-guidelines-driven switch to vegetable from animal fats [with an intervening digression into trans-fats along the way]? Is it an unforeseen but costly consequence?

It was only a few weeks ago that Professor Keith Woodford [Lincoln University] raised the issue in his blog of PKE usage in New Zealand. The country’s dairy industry has taken massive advantage of the increasing availability pf PKE in its wider geographic region. In 2000 New Zealand imported 539 tonnes of PKE [FAO]. By 2013 this had risen to 1.6 million tonnes! Ireland, by contrast, imported an eighth of the quantity in 2013. Now PKE is a genuine by-product of palm-oil production [simply nobody would grow oil palms for animal feeds, the yields are just far, far too low] but that aside, Professor Woodford still considers it necessary for New Zealand to look at how it can protect its grass-fed, sustainable image from being undermined by its use of a potentially ‘toxic’ [from an environmental image perspective] imported animal feed. Ireland needs to watch this space.

Here I have highlighted issues surrounding two sources of animal protein feeds; both have environmental question marks. One would strongly recommend that, in the context of promoting Ireland as a sustainable, green premium-foods producer, their sourcing is reviewed. It is a review that should also be taken further in terms of animal feed imports; the overall tonnage is not limited to circa a million tonnes of proteins as [in 2015] a similar tonnage of food processing by-products was also imported. And then there was nearly another million tonnes of maize… Ireland’s livestock farming is highly import dependent in terms of feeds, fertilisers and fuels and it could have implications when it comes to selling the country’s green, sustainable image. One accepts that Irish farming, with its limited land resources, needs to import what it cannot produce but it is important to ensure that the input supply chains are also verified as ‘sustainable’.

There looks to be several positives appearing concerning cattle farming at present; albeit for cattle farmed in a certain way. There is a lot of talk of ‘grass-fed’ but, as stated in a previous blog, it will become insufficient to be selling products that are loosely-defined as ‘grass-fed’. There is also the Omega 3 / Omega 6 issue that favours grass-fed over grain-fed. And then there are farmers who are working on grassland management techniques focused on sequestering carbon. And there are researchers and practitioners who belief that it is possible to use cattle to regenerate ancient grasslands and restore arid areas. The author believes that the coming years will reveal that cattle farming is not all bad, far from it. It is just that we must be selective about how we farm cattle and, many people say, some societies must eat less meat per se. They must simultaneously place a greater value on meat itself.

Having started by writing about nutrition, I will come full circle and mention the current ‘rehabilitation’ of the animal fats. At least it has happening for some, if not others. It is now, at least, a point of controversy. I would recommend reading ‘Big Fat Surprise’ by Nina Teicholz; it takes to task many decades of what has become the conventional thinking on nutrition. It asks just how far reaching have been the health implication of those guidelines and our replacement of animal fats with vegetable fats and fats with carbohydrates. I cannot adequately summarize here what Nina Teicholz has to say, but for anyone with interests in the production of grass [herbage is a better descriptor] -fed meat and dairy products, it should be obligatory reading.

Further, I would add to the obligatory reading list ‘Defending Beef’ by Nicolette Hahn Niman and ‘Grass-fed Nation’ by Graham Harvey. For herbage-focused farmers they are a triumvirate of books when it comes to creating a vision for the future. By reading them together, one can see how nutritional guidelines have impacted upon the health of whole nations and massively influenced the direction of the farming and food industries.

When supported by rising consumer wealth, the nutritional guidelines have had environmental consequences as we have used soybeans to fuel the growth of, in particular, poultry meat production and palm oil to provide for the needs of a food industry in a post-trans-fats era. They have also impacted upon animal welfare and especially bird welfare as we have switched to white from red meat. These are consequences that are often go unmentioned; they are extrapolations of my own and they come from joining the dots of what is a complicated issue. They are, however, issues that herbage-focused farmers need to understand when everyone appears to be blaming the poor old cow.

is not saying that cattle production does not have its issues. Should we be eating so much cheap beef? Maybe we should be eating more pulses directly rather than converting them into proteins via farmed livestock? Maybe we should be asking ourselves more rigorous questions over the merits of confined versus free-range livestock farming. And, although I have highlighted, the environmental consequences of soybean and palm oil production, we should not ignore the impact of cattle farming on, for example, water quality or carbon emissions in general. And we should be asking ourselves just how resource hungry is grass-based farming when it is reliant on man-made fertilizers rather than nitrogen fixed by legumes. Everything is not rosy in the garden, but it is also not as weed-infested as some would like us to believe.

opportunities that changing thinking on nutrition could be immense for Ireland’s ruminant-based agriculture. They will, nonetheless, not be realized by believing that a generic-Irish, slap-a-sticker-on-it, sell-what-we-have approach will work. It is not what will convince the target consumer to pay the premium necessary to allow the structure of the Irish farming industry to remain. As I often state, for that to happen we need to see a premiumized farm-gate price. That could happen given that premium-paying consumers are going to increasingly demand credible traceability and a fuller understanding of the farming system behind the product [and providing them with anything less will risk another ‘horse-gate’]. The foundations of that credibility must be created on the farm with farmers making the changes necessary to deliver on what the consumer aspires to. And when one views it from such a perspective one also realizes that the opportunities can benefit the farmer; that is if they are their leadership are willing to go out and grasp them before others do.

ARE SOME COWS NOW MORE EQUAL THAN OTHERS?

Having spent much of this Millennium working on investment plans for dairy farming and milk processing, I am used to looking at variations in those that supply the milk. They have included species variables [cows, sheep and water buffalo] and within species variables like breeds of cow, yield intensity, forage and feed sources, organic or not… etc. One becomes adroit at developing the farm management planning data, assessing what the constraints are and identifying what are the most relevant key performance indicators to use. I was lucky I was taught by, and then worked alongside, Professor John Nix, the best farm business specialist we have ever had anywhere, anytime. At Wye we developed the methodology, the systems and provided the data.

As climate change has risen up the agenda, I naturally started asking around for the data that we could work with on farm. If farming is to be constrained [and possibly, heavily] by emissions limitations one assumed that someone somewhere had, post-haste, started researching how these constraints were going to play out on farm. Sadly, it appears that the emissions being attributed to agriculture have been based on some complex models that, all the same, lack any detail when one ‘drills down’. Apparently we are being told that we have to cut our emissions but little to no information to plan with. It is a highly unsatisfactory situation.

The approach at the moment appears to be to tell the farming community to reduce numbers to cut emissions. The general populace is being told to reduce meat and dairy consumption. A few sceptics are asking whether this is the climate-change or anti-animal agricultural lobbies at work. Ultimately, the farmer is left in a void where the only clear conclusion is that this is going to impact upon farm incomes. At present, I should not be writing this, I should be working out the numbers, the data, the information needed to allow the farming community to plan within new climate-change constraints but, alas, we seem to live in an era where resources are devoted to making a noise, to lobbying and not to providing the planning information upon which to identify solutions.

I first hit this issue when I wanted to start working out what cattle-farming systems would provide what farm income in relation to different emission levels. If a [or the] primary constraint on the farm income becomes GHG emissions [or specific GHG gases] we have to shift our KPI to income per that GHG constraint and other KPIs to performance levels in relation to the same constraints. At present, the response is to measure emissions on farm and to reduce the carbon footprint per unit of production. It emphasises ‘traditional’ efficiency gains over any radical climate-change solutions because we just have little else to work with. We are facing some of the greatest pressures ever for our farming and food systems in a void of farm planning information. And nothing much seems to be happening about it. I am not sure if many key players even know there is an issue!

Earlier I tried to classify cows. One knows that there are a myriad of beef production systems around, probably slightly less when it comes to milk production and can we simplify this? I am researching a great deal these days about grass-fed [or is that forage-fed or pasture-fed?] so I thought we could separate cows into those that are raised on a mainly grass/forage based diet and those that are grain-fed. But then again what proportion do we use to qualify for one or the other?

My broad rational was that forage-fed and grain-fed would be having different impacts in terms of GHG emissions. An issue I have been tracking closely [as it is the one that could be the climate-change game changer] is carbon sequestration using ruminant grazing systems so immediately one is asking whether there are different degrees to which a forage-fed cow can emit GHG gases if, critically, emissions AND sequestration is taken into account. Also, does that cow require different grazing practices and sward mixes? And how well do pastures sequester carbon if they are frequently re-sown, treated with high nitrogen fertiliser applications and/or copious quantities of slurry? If the issue is far more about the health of soil micro-organisms than we have considered to-date, how is the subterranean part of the animal kingdom fairing under different grassland management regimes. The word ‘complex’ immediately comes to mind and using a ‘grass-fed’ system itself is far from simple. And have we even really started the research; or is it even too ‘radical’ to be funded?

At the other extreme we have confined cattle systems. Just how reliant are they on local forages? More importantly, when it comes to brought in feeds where are they sourced? These cattle may share the same physiology as their grazing counterparts, but is that where the equality ends?

Confined systems have their defenders. We read about faster growth rates and greater production efficiency using confined systems but is that based on a flawed emissions-only methodology? One also wonders whether we will shortly be basing our farm management planning judgements on how much is produced per unit of animal pharmaceutical so there will be yet more to consider.

With animal farming, the focus is often on plants grown on land cleared from rain forest [soybeans or palm kernel extract] but should we also be asking what has happened to the Argentinian Pampas? Has the growing of soybean [for oil and cake] replaced grass-reared beef? Have we released vast amounts of carbon from these grasslands and put the cattle into beef lots where they are no longer a part of a carbon sequestration system? Is it a double negative? It is just one example of the many issues that we need to consider going forwards.

One of the few definite conclusions that one can draw at the moment is that if there are pasture-based cattle systems out there that have zero [or positive] net emissions surely we need to know what they are; and fast? We can then focus on producing lower net emissions meat and milk; albeit not in isolation of having an eat-less-but-better, animal-products debate.

One does not expect to see the human race give up meat and milk anytime soon. It even appears that the nutrition debate is moving on as questions are raised about the origins of our long-established nutritional guidelines. Where they are going is for the reader to decide as I am not qualified to make any but my own personal judgement. The debate is, however, on-going and as an agri-food sector analyst/strategist, I make it my business to follow what is going on. And, apparently, there may be nutritional differences between cattle reared in different ways.

So here we have another variable. We may be sometime waiting for the ‘science’ on this one as it appears that there are conflicting views in the nutritional world. Will the conservatives, stick with what we have, or radicals win out? Either way it will have consequences for our food producers and our cattle farming systems. It may not make an industry-wide difference in the imminent future but it will make a difference for those few farmers who want to enter the brave new world of directly supplying products to ‘issues-aware’ consumers. Social media will drive change at the periphery; the question is how fast will the oddity become mainstream? And just how fast is ‘grass-fed’ [as per how it is already defined in some countries] exiting the ‘oddity’ category?

Agriculture and food is a fabulously fast moving subject at the moment; at least it is off the island of Ireland where resistance to change appears to be the order of the day. Change creates opportunities and that is the case with cattle farming. But to see them one has to be willing to recognize that all cows are not equal and that one cow in one farming system is rather different from another.

For the farmer, the decisive question is which cow will produce the product that makes she or he the most money and, crucially, can the farmer deliver that product to the consumer that is willing to pay for it. The farmer’s cow may be far from the equal of her neighbour but if she does not have the route to market to reach her consumer, there is little likelihood that her enhanced credentials will benefit her owner. In Ireland it is a particular problem as the too limited, less than dynamic routes to market are effectively ensuring that all Ireland’s cows are indeed equal to each other. It may be a great situation for bovine egalitarianism, but it is a state of affairs that is not going to deliver sustainable farm incomes to Ireland’s small-scale cow keepers.