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.

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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.

 

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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.

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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.

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TIME TO STOP THINKING THAT LAMB IS LAMB

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

The third Love Lamb Week [#lovelamb] is happening across in the UK and some Irish farmers are joining in as, although, they are separated by the Irish Sea, they recognize a common problem.

According to ADHB, 1995 retail purchases were 131,000 tonnes compared to under 70,000 tonnes in the last year. UK lamb consumption has declined by over 11% over the last 12 months alone; a fall led by roasting leg joints [-15%] and roasting shoulder joints [-22%]. Total lamb consumption has gone from 7.5kg per capita in 1995 to 5.1kg in 2015 and it appears to be continuing to fall. One can expect the situation in Ireland to be no better. In anybody’s language this is serious.

While not wishing to malign the current initiative, are tweets, likes and shares really going to reverse the decline in lamb consumption? Or do we first need to recognize that the problem runs deeper?

A starting point must be to ask just why the decline has occurred. Is it an image problem or has the offered product just become unsuited to the demands of modern food consumption?

Has the farming industry failed to adequately promote lamb as a food product? In recent years there have been live TV programmes about lambing. We are also educating the young about where their food comes from. Open farms and places to meet farm animals are great for kids but are the sheep keeping one step ahead of us in the public relations battle? Does introducing children to lambs, and especially the bottle-raised variety, encourage them to be lamb eaters, or are they more likely to sign up to the idea that to Love Lamb means to become a vegetarian? Is our desire to portray the positive side of farming back-firing in this case?

Previous generations became acquainted with the smell of roast lamb long before they met the real thing; nowadays it is different. But we still choose to promote sheep meat as lamb and worse we even add the word spring [lamb] to emphasise the image of a baby lamb frolicking in a flower-filled meadow in spring time. Maybe we should stop using lamb and spring lamb as the images they conjure up for young consumers are ones that only lead to declining sales? It is a thought.

My fear is that the problems facing the industry go much deeper, it is about the product itself?

The demise of lamb as a meat is well known, it reflects the decline of the Sunday roast and family meals. It was not well suited to fast food or fast cooking as sheep meat is about flavour and time. The way we now rear it has given it conformity, it is about carcass size that conforms to supermarket packs, but of all the meats, the flavour of lamb and sheep meat is about what the animal eats. And are we guilty of trying to replace these flavours with fine words? Are we insufficiently critical of the product itself? Nobody likes to talk down their own product, but have we lost our objectivity?

We seem to think we can stem the ebbing tide with ‘marketing’, as if we can reverse such a strong market trend with promotions. Maybe this just indicates a failure to understand the nuances of the market. In the rush to place our well-conformed lamb into supermarkets, have we failed to develop the very differences upon which we can maintain and build consumer appeal? One fears so.

As lamb is moving backwards from the mainstream to the niche, do we need to start rethinking both our product and marketing strategy? At present, lamb’s consumer demographic is aging as the young are not buying lamb. We must not lose sight of them as longer-term consumers but, meanwhile, should we focus upon the older demographics with higher disposable income?

Should we be focusing on developing lamb, hogget and even mutton as a connoisseur’s food? Do we start rebuilding the market position of these meats by aiming at the top; it is after all where it has been far from forgotten. It is also a foodies’ segment that the young will buy into as they aspire with age. It is, however, a demanding market that wants a highly differentiated product with flavour and a multiplicity of other characteristics, environmental and animal welfare included. And thankfully for farmers, they are characteristics that are created on the farm and not in the factory.

One is aware of some local developments happening in Ireland. There are the ‘Mountain’ lambs and Achill Island Lamb. They are very much products for the connoisseur and they are exactly the ones that are needed at the top of the market. They highlight the differences that can be achieved when the product is linked to its terroir and the detailed back story is brought to the fore. They will not, of course, be the product or marketing solutions for all, but they should guide our wider thinking towards where lamb, hogget and mutton needs to go. It is about product development; a complex but not insurmountable task. The initial ideas are out there but they must be taken forwards.

The alternative is to continue to contend with chicken, pork or even beef by going head to head on the key attributes of convenience and cost. Simply, it is not going to work, as recent evidence shows. To continue following this path may suffice for some, for those who can compete on cost, but it is not the way forwards if you are small of scale and unable to survive financially at the foot of the existing supermarket supply chains. For the others, it is about changing and changing to survive.

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JUST WHY IS IRELAND IN THE LIVE EXPORT TRADE?

This post first appeared online at http://www.thatsfarming.com on the 4th September 2017

Just why do the words live export raise the hackles of those concerned with animal welfare? After all, to export is only to cross a national boundary so moving a cow from Donegal to Derry is a live export. True, long-distance overland haulage also attracts their ire but nothing seems to the way that live exports do when farm animals are loaded aboard ocean-going transports.

Notwithstanding that livestock farmers should aspire to operate high animal-welfare standards, consumer perception of its products must be paramount for both the Irish dairy and beef sectors. Neither can compete on a cost-alone basis with international players so must do so on quality. And in this age, a core quality characteristic is animal welfare.  One can also assume that there is a direct correlation between premium market prices and animal welfare standards. To take a simple example, a free-range label for eggs is about animal welfare and free-range eggs attract a premium.

Some may think that Ireland can export live animals to elsewhere while supplying animal-welfare-conscious markets like the UK but, ultimately, it will not work; you cannot have your cake and eat it. Live exports destined for countries other than to its immediate neighbours, risk undermining the integrity of the credentials claimed for its food products; be they animal welfare related or not. So why should Irish cattle and sheep farmers, who are often heard to be voicing their support for the live export trade, be willing to risk a premium-price-paying consumer backlash from doing so?

When faced with criticism over live exports from lobbyists, the response from their representatives is that farmers have no other choice; the processing sector in Ireland does not provide a competitive market for them to sell animals into. Effectively, live exports are the only means by which farmers can seek to counterbalance, albeit only partially, the over-bearing weight of their supply-chains partners. It is this lack of competition and its depressing impact on prices that is driving farmers’ desire for more live exports from Ireland. Their argument has much validity, albeit when talking beef cattle, the percentage exported is very small. The price competition is likely to be only sporadic and only occasionally visible in the local mart immediately pre-shipment.

As with green issues, lobbyists need to engage with the farming community.  This is not only about animal welfare, it is also about farmer welfare, it is about their income. It needs a far more holistic approach beyond a moratorium on live exports. It is about finding solutions and the tangible support needed to implement them. And lobbyists need to work together with farmers on this.

Removing the farmer’s need for exporting finished cattle and sheep

Should we start by asking if there is a role for live exports for slaughter to countries outside the regulatory framework of the European Union? Yes, one understands that some specific markets demand live animals but it is not mandatory to supply them. However, with sheep in particular, these markets influence prices so serious market [and product] development work is needed if farmers are going to voluntarily withdraw from them. They will need substantial help.

Establishing maximum travel-to-slaughter times should then be a goal for lobbyists and farmers. One suspects it will appeal to the many consumers for whom animal welfare is a major issue. It would be worth reviewing Protected Designated Origin meat products elsewhere in the EU to see how often local processing is a necessity to qualify for designation.

Admittedly, recent agri-food policy has advocated rearing and processing beef at home but that seems to have been motivated by increasing the value of exports per se, ensuring high throughput volumes for the factories and preserving processing jobs. It has glossed over the issue of too few route-to-market options for the farmer, its impact upon prices per se, and that it inhibits the development of niche and premium markets and the products needed to supply them.

The industry needs an 80:20 split. The 80% should provide for the processors who operate a high-throughput model to make their economics work whilst the 20% is a realistic target for premium, more niche-market products. It is the only approach that will truly develop Ireland as a food island and ensure that farmers have opportunities to enhance their farm-gate prices.

Specifically, with beef, the 20% should be filled from the suckler sector. Naturally-reared calves is a plus for animal-welfare aware consumers and it should be the foundation characteristic of a product that also encompasses many eco-friendly farming practices. In the coming years the eat better but less meat approach will focus consumer thought on the confined systems versus freedom-to-roam issue and will offer a major opportunity for Ireland. Getting ‘complex’, multi characteristics products to market is, however, the problem and it is, frankly, not one that is going to be resolved if there is only industrial-scale, inflexible processing facilities within the supply-chain. That has to change.

Should we be looking elsewhere for ideas about how to develop the top 10-20% of the market? France springs to mind. There it is about designated origin products where farming practices are well known to the consumer and processing is invariably small and local. For meat, local slaughter is a must. These production, processing and marketing systems are what Ireland has to develop.

Bureaucracy is often cited as the major problem for small-scale processing. It is often accused of killing off our small and local meat processors. That must change. Hence, as the Common Agricultural Policy supports the primary producers, it should also step up and support the primary processors by way of paying for the bureaucratic costs relating to food safety. It would be a simple and major leap forwards for restructuring and improving our food systems.

And finally, one should add that it is imperative that competition exists in all aspect of the post-farm-gate supply-chain including the easily over-looked provision of rendering services. When ‘Brussels’ talks about having balanced relationships in the food supply-chains, the Irish folk there should start at home. And they need to ensure that Ireland is the example for others to follow.

Providing farmers with alternatives to the export of weanling cattle

Livestock movements have been part of food production for millennia. Herders have moved stock vast distances to seek grazing and transhumance practices take stock from the valleys to alpine pastures in the summer. Within the British Isles, stock has moved from uplands to lowlands. Traditional mixed farming in tillage areas often used young stock raised in the north and west. Ireland itself sent weanlings across the Irish Sea to England; indeed, if we are going to see soil restoration happen on English tillage lands, it may need to happen again. Farming is constrained by topography, climate and soils and that means some animal movement is necessary.

It is sad to read of weanlings being exported. Where they are suckler-reared they should be sold as such within consumer-facing products that highlight their naturally-raised credentials. There is also a gradual realisation that suckler-reared beef raised on biodiverse pastures using specific grazing practices may also be the climate-friendly way to produce beef. Especially so if the weanlings are finished on biodiverse swards and herbage-based fodders with only a little locally-produced grain. At present, Ireland is exporting the very foundations of what should be truly premium beef products.

When the above is realized, as it eventually will, and the products and routes to market created, there will be little demand from farmers to see weanlings exported. It is a point that animal-welfare lobbyists must help farmers to reach. It is a win-win situation.

Addressing the issues that drive the export trade in dairy-bred calves

It is a contrasting picture with the export of dairy-bred calves. Is exporting calves for the Dutch veal industry a necessity because of their numbers and/or their unsuitability for producing beef? One hopes that culling calves does not also become another issue. Live calf exports are something that the industry must be wary of as they may undermine the sustainable and green credentials of Irish dairy produce. For the increasingly savvy consumer, they do not go hand in hand.

It was only recently that BBC highlighted the dairy-bull calf problem in the UK. There animal rights activists effectively made it impossible to export them. Variants of veal are being developed but it is not always easy to educate the customer. It would be no easier in Ireland to develop a veal sector.

One has heard it suggested that breeding for dairy-only traits is lowering the beef value of many dairy-born calves. Hence, is an expansion in smaller ‘grass-system’ dairy cows impacting upon the quality-focused beef sector? Further, is an increase in dairy beef numbers for processing into farm-assured mince and burgers undermining the price of beef-bred cattle; after all, when processing is about throughput surely more of the former will impact upon the price of the latter? The net result is beef farmers pushing for more live exports to reduce the cattle supply to the domestic market.

Hence, should the dairy sector be taking a broader view of the genetics that it uses, not least to minimize the risk to its own image from dealing with low-quality, low-value calves? Given that the average milk yield within the Irish grass-based dairy system is low, maybe there is scope for a more dual-purpose rethink; sacrilege that it may be to suggest such. As with so many things in life, problems can become opportunities, but only when we look outside the box to find them.

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The wheat and chaff of synthetic food

Posts from Keith Woodford

It has become fashionable for agri-food commentators to talk of disruptive change. In particular, in recent months there has been much talk about industry disruption that will supposedly occur from synthetic food, with much of that grown in a laboratory.

Until now, I have steered clear of discussing synthetic food, despite often being asked my opinion. But now, I have decided to venture forth.

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SHOULD IRISH FARMING GO GMO-FREE?

This post first appeared online at http://www.thatsfarming.com on the 30th August 2017

The idea of a GM-free Ireland is rising the agenda. To date, the debate has been about using GM technology on farm but, increasingly, it is being driven by consumer demand for GM-free foods. It is now about some supermarkets in the EU wanting products that are from entirely GM-free supply chains that, with animal products, contain no GM animal feeds. With its grass-fed focus, is this an opportunity for the Irish farming and food sectors?

Various questions over going GM-free immediately spring to mind.

How much GM feed is imported into Ireland and for what purpose? Can this be replaced so all-Ireland can be GM-free? If not, can GM feed be segregated so certain farming sectors can operate with GM-free status? Or is it best to focus on producing GM-free products and to farm to create them? Will GM-free come at a cost to the farmer and will that cost be compensated for by an enhanced farm-gate price? Will the farmer receive a further reward for the hassle of being certified GM-free? And critically, does Ireland have the post-farm-gate supply-chain structures to differentiate GM-free product streams and, hence, operate to transfer any premium from the consumer through to the farmer? Or will being GM-free only benefit those beyond the farm gate?

There are those who will argue that forsaking GM technology will inhibit farmers to produce more and to compete with those who have access to the technology, but that is another debate. This one is about consumer demand and deciding if it is viable for Irish farmers to meet that demand.

Although others within the supply-chain may see ‘GM-free’ as a positive attribute to have when it comes to selling their products, the costs of being GM-free will mainly fall on the farmer. They need to be compensated and, preferably, rewarded by the market for being GM-free. If Ireland is become a GM-free food producer, its farmers must see the benefits from being so.

Ireland is a major importer of cereals and oilseed cakes for animal feeds.

In 2016 (all data is from the CSO) Ireland imported 968,000 tonnes of grain maize of which 350,000 tonnes maybe GM-maize from North America. After considering other cereal imports and home production, Ireland is probably about two-thirds self-sufficient in cereals for animal feed.

In contrast, the Irish livestock industry is highly dependent on imported protein feeds. In 2016 close to 800,000 tonnes of oilseed cakes was imported, a reduction of 20% on 2015. The total volume and oilseed cake mix varies year-on-year, although soybean meal volume is relatively constant. Nearly 450,000 tonnes of soybean meal were imported in 2016 up from 375,000 five years earlier. It is sourced from the Americas where nearly all soya is GM. Of the three major growers, only Brazil has any significant production area of GM-free soybeans. The USA and Argentina are the other two.

In addition to soybean meal, about 225,000 tonnes of rapeseed and sunflower seed cake [EU sourced and non-GM] and 125,000 tonnes of palm kernel cake were imported in 2016. One should also note that there is a sustainable-sourcing issue around palm kernel cake, imports of which have often been nearer 200,000 tonnes per year.

In addition, nearly 700,000 tonnes of prepared animal feeds were imported, a significant proportion of which originated in the USA. Do they have a GM-free provenance? There were also nearly 460,000 tonnes of brewers’ grains and 150,000 tonnes of sugar-beet pulp imported. As some originates in the USA, its origins need checking.  Finally, about 600,000 tonnes of other food industry by-products were also imported in 2016 with Argentina being a major supplier.

In total, livestock feed imports in 2016 were about 3.7 million tonnes or over 60% of a total feed use of approximately six million tonnes.

From a GM-free animal-feeds sourcing perspective, the biggest issue is GM soybean meal and the feasibility of substituting it with other non-GM protein meals. And there are also other imports of food-industry by-products from the Americas that would require verifying as GM-free.

As one investigates the concept of a GM-free Ireland further, it is clearly not as straight forward as substituting imported GM soybean meal with other oilseed meals.

What is the realistic way forwards for GM-free farming in Ireland?

With Ireland’s emphasis on grass, just how much GM-associated feeds goes into ruminant rations? Or, more specifically, what proportion goes into pigs and poultry and ‘feed-lot’ finished beef? Among the country’s dairy herds, there are also those that use far more meal than their lower-yielding, grass-based counterparts. It is complex and maybe a GM-free Ireland is, at least in the short-term, a bridge too far. At present, more research and investigation needs to be done and a practicable strategy developed from there.

In the short term, it maybe be better to determine how to support the development of GM-free sub-sectors and individual products. The costs need to be assessed and the potential market-derived benefits evaluated. As with the debate over forsaking the use of GM technology, others will argue that there may be environmental and health benefits from being GM-free, but for now, this is about doing a cost-benefit analysis of fulfilling tangible market demand.

The home production of peas and beans has, historically, been low. It has been rising with the current crop-specific support scheme but it will still be well short of what would be needed to provide for cattle and sheep feeds let alone pigs and poultry [about 25% of feed use]. One would, suggest that in the short term, the focus is upon sub-sectors of the ruminant sector where going local and using GM-free proteins produced in Ireland may be achievable. It may, nevertheless, still need the transmission of a significant GM-free price premium from the consumer all the way through to the tillage farmer.

For the beleaguered Irish tillage farmer, being part of a dedicated, higher-value product supply chain is exactly what is needed.  Triggering an expansion of certified-by-someone, GM-free may, nonetheless, need direct government support to facilitate it. If, however, there is consumer demand for GM-free foods, we need to look at the feasibility of meeting that demand from Ireland. It could be a significant opportunity for Irish livestock and tillage farmers. And if it proves to be so, we must ensure that they and not just their supply-chain partners benefit from going GM-free.

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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.

 

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CONSUMERS WILL NOT ALLOW COMPLACENCY OVER ANIMAL WELFARE

This post first appeared online at http://www.thatsfarming.com on the 21st August 2017

This week That’s Farming post “Fatally injured Bullock left for over 10 hours in mart” has been viewed over 24,000 times. It is also a week when BBC Countryfile raised the question of how many calves are killed soon after birth on UK dairy farms. And it is not so long ago that the fate of Irish cattle exported live to Turkey was also attracting the attention of the media.

The common theme of these stories is ‘animal welfare’; a term that covers an array of activities, be they everyday farming practices to what one hopes, as with the mart bullock, are far from common-place incidents. Animal welfare is a concern from birth to death and, if you believe that eating quality is influenced by pre- and post-slaughter practices, it extends to the consumer’s fork.

Vegetarian and vegan numbers are rising as more people prefer not to eat meat or any animal-derived products respectively. Some may consider them as at the fringe but to do so is to hide from the reality of their broader influence. Then we have foodies who seek premium foods and who want to know more about production and processing practices and animal welfare issues are high on their agenda. And then we have those lobbying for an eat less but better approach. True their primary concern may be to reduce foods’ carbon footprint but you can rest-assured, most will see better as also relating to animal welfare.

In a social-media-informed market that is increasingly urban, animal welfare, in all its guises, is only going to rise further up the agenda. We are only seeing the tip of the iceberg at present. And any producers who aspire to supply these markets need to be highly aware of animal welfare, what it means to consumers, and to work out how to respond accordingly. If you don’t you will join a race to the bottom where only cost matters, whereas, for a country with small-scale farmers, it is must be about partaking in the race to the top.

To do so, we must first ask if we want to impose market-orientated regulation upon ourselves or accept it from others as has happened before? Demands for higher animal welfare offer opportunities for those who recognize them as such and are willing to change to meet those demands. Ireland’s farmers work on the periphery of major consumer populations and they will have to react to the demands of those consumer, eventually. The question is, do they wish to be in control to the degree that they can they make a profit while fulfilling those demands?

Inevitably, there will have to be some change to farming practices. It will mean, for example, questioning dairy systems that produce low-to-zero-value bull calves. At the other extreme, a few dairy farmers in the UK are trying to develop calf-at-foot milk production; it is a positive way to address the rise of veganism but it is not easy. It also means developing very close contact with the consumer. Without doubt, changes accrue cost and the question must be asked of our broader society, do we wish to support farmers to make these changes?

After decades of responding to a low-cost-food policy environment, change will cost farmers and if we, as consumer-taxpayers, wish to see major changes to our food systems we must be willing to pay for the changes through the shop till and through offering change-over financial support. One would also like to see more animal welfare groups support farmers to change. There is a relationship in the UK between Compassion inworld Farming and the Pasture for Life Association.

The issue of live exports for meat animals is a case in point; it can only be resolved without antagonism by cooperation. Farmers point out that live exports are needed to counter-balance a local livestock market dominated by a few processors. It is this lack of local competition in the supply-chain that is driving the farmers desire to see live exports grow. The solution is more routes to market that enable farmers to slaughter and process close to home. It is a double win as the presence of these new routes should also allow farmer groups to access premium markets with fully traceable, designated-origin products. Hence, farming leaders and animal-welfare lobbyists should hand-in-hand be demanding that the government helps to create more routes to market. Further, those Irish in Brussels who talk of more competition in the food supply-chains should demand that it happens within Ireland first.

Over the years Irish beef has gone from being sold frozen to being sold fresh. It was a step-change in the industry. It is now time for another one. This will not happen overnight and there will remain a major role for the current high-throughput/low-margin players to handle the volume side of the business. In theory, they could provide farmers with alternative routes to market, but does their operational model or facilities allow it? Could they provide a fully-transparent, competitively-priced slaughtering and processing service to enable farmer groups to develop their own consumer markets? It would certainly take a great leap forwards in cooperation and trust from where the often-antagonistic relationship is now, but one should not rule anything out. Supply-chain partnerships is where it is at, but will the Irish meat sector ever get there?

If not, it is time for farmer groups, possibly in the guise of co-operatives [where farmer-ownership is guaranteed infinitum], to go their own way. In so doing they need farm to fork control. Both farming leaders and animal welfare lobbyists need to see that this happens. And within this the farmer groups need to do their own market research and product sales as it is imperative that they understand their customers and the final consumer. For too long now they have been several steps divorced from the consumer. They now need to fully appreciate what motivates them, animal welfare perceptions included. Only then can they ‘design’ the products that meet the expectations of consumers who are willing and able to pay premiums to those who satisfy their demands.

And as to the Government, it must ensure that supply-chain development funds are available and that regulatory burdens are not inhibitory, even to the degree of subsidizing the on-going bureaucratic costs. So often, these are cited as the reason why we have lost crucial, local supply-chain options and they need to be addressed directly. The Government’s role is about removing bottlenecks to farming’s development and this is a prime case in point when it comes to enabling Irish farmers to sell high animal-welfare, high-value products to consumers who want to buy them. And ensuring that the Government plays this role is why farmers pay their associations to represent their interests and, in this instance, it is now time for the latter to stand up and to be counted.

 

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