Strong prices prompts call for more beef marketing groups

Meagre cattle supplies across Europe and strong UK beef prices means now is the time for producers to form co-operative marketing groups, says an industry leader.

Neil Shand, National Beef Association (NBA) chief executive, said committing to forming long-term groups to increase bargaining power is far better done now when prices are good.

“There is currently a 20-25p/kg bonus if you can offer processors large loads of even cattle,” Mr Shand told Farmers Weekly. “When the price is pressured, you do not see that bonus being offered.

See also: What are the latest beef prices?

“It’s a big ask, but I would urge producers to reach out to the NBA to start creating such groups. People will say there are plenty of co-operatives that have failed, but we must fully commit and explore the options available to us.”

Irish success

Mr Shand noted the success of buying groups and marketing co-operatives across Europe, where selling through a group is seen as basic, good-sense business practice.

One such body is the Emerald Isle Beef Producers (EIBP), dating back to the Beef Movement Plan in 2019, when Irish farmers protested at factory gates and disrupted supplies when the price dropped to £2.95/kg.

Mr Shand stressed that the NBA would not support such market disruption, but the EIBP’s marketing activity was admirable.

Four years on, the EIBP handles 5,000 cattle annually, and is in talks with an Irish processor and a North African buyer, which, if successful, would increase the group’s throughput seven-fold.

County Meath farmer Eamon Corley, EIBP chairman and procurement officer, said there were two key elements to the Beef Plan:

• Marketing group Costs €100 (£86) for a lifetime membership. Currently boasting 350 members and averaging 90-100 cattle a week
• Buying group Annual membership of €20 (£17.27) in which about 2,500 businesses get deals on 30 inputs, including diesel, fertiliser, and insurance.  

He estimated that 90% of Irish farmers were under no contract, meaning they could deal through a group.

Mr Corley added: “It’s a difficult thing to start up and you don’t get big bonuses immediately, but over a couple of years you steadily supply cattle and start to get the top price that is available.”

Price premium

Limerick dairy beef finisher Sean O’Connell has been a member of the EIBP since its inception in 2019.

He says membership was worth 20 euro cents/kg (17p/kg) on a recent single steer.

“Generally speaking, the price lift from group selling would be nothing like as big, but the point remains that the more numbers we have going through the group, the stronger the bargaining hand of the EIBP.”

As a small-scale farmer sending 50-80 cattle to slaughter each year, Mr O’Connell believes he can get the same price as a finisher sending 50 most weeks. 

“I believe both farmers and processors benefit from the producer group, because, while a fairer price is paid out across the smaller suppliers, regardless of whether they send five, 50 or 150 cattle in that week, the processor has easier access to greater numbers of cattle and fewer phone calls to make, streamlining their procurement.

“Without strength in numbers, we are open to supply and demand and fickle processor behaviour. When cattle are in tight supply, the processor rolls out the red carpet and everything is in specification, but when they are plentiful, they screw prices down and penalise you – but that’s business, I suppose.”