The Northern Ireland Red Meat Industry Task Force was established to develop a 5 to 10 year strategy for the beef and sheepmeat industry. The Task Force includes representatives from the UFU, NIMEA, DARD, LMC, Invest NI and NBA.
This Task Force report is the culmination of several months of work by the Northern Ireland Red Meat Task Force. This has included a survey of over 1,000 producers, a detailed financial survey of the economics of processing, over 100 in-depth interviews with stakeholders and experts from across the industry, analysis of a range of case studies, field visits and a series of Task Force review meetings and workshops. The Task Force is very grateful for the cooperation and engagement of the whole industry in the development of this report.
The red meat industry in Northern Ireland is currently generating a loss of over £200m per annum when full production costs are included. This whole industry loss is driven by the very poor economics of production. The losses from production - estimated at ~£260m per annum with fully loaded costs - are significantly higher than the ~£15-20m profits per annum generated by each of the processing sector and the retailing sector of Northern Ireland red meat.
The result is that the vast majority of producers are using their Single Farm Payment (SFP) to cover the costs of loss-making production. This situation is despite reasonable market conditions in which consumer demand for beef and lamb in the UK has been stable or slowly growing. In fact, over the past 10 years against the backdrop of BSE and its effects on trade and consumption, Northern Ireland has been successful in building its market share with grocery multiples and food services in Great Britain, within an increasingly competitive global market.
Producers have been trying hard to find ways to reduce their costs and improve efficiency, but this has proved extremely difficult. There is a very highly fragmented producer base in Northern Ireland. Some 20,000 farms are engaged in red meat production: over 80% of beef suckler farms have fewer than 30 cows and nearly 80% of beef finishing farms have fewer than 30 head of cattle. The ability of small producers to improve efficiency further and to benefit from economies of scale is very constrained. This fragmentation also makes it very difficult to introduce standardisation and adoption of best practice (for example, on age at slaughter) and it hinders the development of commercial partnerships between producers and processors/retailers.
Producers are acutely aware of the difficulty they are in but so far have been very reluctant to cease production. The Task Force survey of 1,000 producers suggests that instead many (over 40%) are planning to reduce their herds to stem the losses. This would improve cashflow in the short-term, but will not reduce fixed costs and would likely lead to further inefficiency.
Contents
Executive Summary
Key findings, recommendations and conclusions
1. Context
2. The market for red meat
3. The current Northern Ireland red meat value chain
4. The case for change
5. Examining viability of production models
6. Task Force strategy and implications
7. Taking the strategy forward
8. Implementation and implications for the main players
Conclusion
List of appendices
Bibliography
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PDF Ebook Northern Ireland Red Meat Industry Task Force: Strategy Review
