Difficult times for both the beef and lamb sectors

Ulster Farmers' Union - County Down countryside, near Dromara. Picture: Cliff Donaldson
Ulster Farmers' Union - County Down countryside, near Dromara. Picture: Cliff Donaldson

The beef and sheep industry is experiencing difficulties this year.

Both beef and lamb producers have seen high levels of volatility in the last 12 months, which is making it difficult to plan their business and keep cashflow positive.

While Northern Ireland is primarily exporting to the GB market, we are now much more exposed to global market difficulties such as the downturn in the Chinese economy, the Russian import ban and the weak Euro. If we take the Euro as example, in July 2014 a 21kg lamb was worth £3.50/kg or €4.41.

In July 2015 a 21kg lamb was worth £3/kg or €4.26/kg. In Euro, the price of lamb has dropped by 15cents or €3.15 (£2.20) per lamb, however in Sterling the value of a kilo of lamb has dropped by 50p/kg or £10.50 per lamb. This clearly demonstrates the impact of strong Sterling on the local lamb trade not just at a farm level but also with overall red meat exports from the UK which have reduced by over 15 per cent compared with 2014.

With our European export opportunities much reduced this year, this has focused minds on the importance of our home market and also the significance of getting access to new markets outside of the Eurozone. This is one of the primary objectives of the beef and lamb and hill farming committees.

The following is a summary of the primary lobbying activities that these committees have been involved in over the last 12 months:

Red meat exports: The UFU has met regularly with the NI Meat Exporters (NIMEA), DARD, LMC and Invest NI to gain greater understanding of global market opportunities and to lobby for faster access to new markets. The UFU intends to intensify lobbying activity this summer by targeting the new Westminster government for increased resources to be allocated for this important objective.

Processor meetings: The UFU has met with local processors and NIMEA to highlight concerns about the volatility in market prices and the lack of profitability in the sector.

The UFU believes that processors need to provide new payment structures for farmers which offer greater stability on prices over longer periods of time.

NZ lamb: The UFU has met retailers in March and again at Balmoral Show to lobby for 100 per cent UK lamb on their shelves. The feature of New Zealand lamb on retail shelves in recent years has been a major focus for the UFU.

LMC statistics for June 2015 show that the worst performing retailer in 2014 has increased their stocking of UK lamb by 70 per cent while NZ stock has reduced by 40 per cent. While progress has been made the UFU remains concerned that there is any non-EU lamb on retail shelves during the UK lamb season and will be lobbying for a continued reduction in NZ stocks.

Cross-border trade for lamb: The UFU has met with the IFA to discuss the cross border lamb trade following the introduction of new EU country of origin labelling laws in early April there were concerns that cross border trade would be significantly impacted upon. The UFU received reassurances from the IFA that they recognised the importance of NI lambs to ROI processors for maintaining plant throughput and supporting prices for NI producers.

Since the introduction of the legislation in April exports have equated to 68,000 lambs in comparison to 85,000 in 2014. The UFU leadership believe that the Euro and increased ROI lamb production are the main contributors to this reduction rather than the legislation.

DNA technology for the beef industry: The UFU is currently investigating the potential to introduce DNA technology into the beef industry. The UFU remains concerned that there is potential within the supply chain for imported beef to be labelled as UK beef. This sort of activity should be wholly condemned and the UFU believe DNA technology may be one way of improving the traceability of beef in the UK as it has in north America and with pork in ROI.

Livestock genomics: The union sees the improvement in livestock genetics as an important mechanism in helping to improve profitability. The Union continues to feed views into the Agri-Food Strategy Board Genomics sub group where discussions are on going about the introduction of a genomics scheme in Northern Ireland, similar to the support schemes available in ROI.

UFU Beef Price Watch: The UFU beef and lamb committee began a process in April 2015 to analyse the beef quotes vs the actual prices paid. The committee are concerned that small producers are getting paid less than large producers and awareness around this must be increased. The UFU now publish a monthly update in UFU Watch to highlight the statistics on this issue.

Cattle ID cross compliance: The UFU has been consistently lobbying both DARD and the ARD committee for relaxations in cattle cross compliance regulations. To date the UFU has successfully lobbied for the reduction of the severity of this issue from a financial penalty to a warning letter; however we are pursuing further relaxations to bring us in line with neighbouring regions and also for improvements in the quality of cattle tags.

Research and education: The UFU believes that research and education are crucial for the development of the beef and sheep sector. The UFU has written and met with DARD, AFBI and CAFRE to lobby for increased resources for new facilities at Greenmount, Glenwherry and AFBI Hillsborough.

DARD veterinary officers: The union has met with DARD on two occasions in recent months to discuss concerns about the conduct of DARD veterinary officials working in meat plants and the number of prosecutions applied to farmers. The union has successfully lobbied for improvements in the procedures they follow which will help farmers defend themselves better should they experience difficulties with these vets. The union would encourage producers to seek assistance from the UFU on these matters if required.

Red Tractor Lifetime Assurance: The union responded to the Red Tractor consultation this spring seeking views on the introduction of lifetime assurance for beef cattle. The union are opposed to the introduction of lifetime assurance which has the potential to increase costs and regulation for farmers for little financial benefit.