Over-capacity bugbear
Over-capacity bugbear
POOR-QUALITY finished cattle and over-capacity in the processing sector are costing the Irish beef industry £120-160 million a year.
Derek Breen, development manager for Enterprise Ireland – a government-funded organisation seeking to improve economic performance of industry – said a new report by his organisation shows beef industry competitiveness could be improved dramatically where beef cattle quality rose and over-capacity in the processing sector was eliminated.
"On average theres 50% over-capacity in plants. Its an extra cost that ultimately affects beef prices," said Mr Breen. He also suggested beef production must be market-driven and the quality of finished beef cattle must improve if valuable export markets are to be captured.
Currently 90% of finished beef cattle are exported from the country – a trade which accounts for 30% of gross domestic agricultural product – yet many of the top 20 processing plants fail to achieve profits above 2% of turnover. For producers about 52% of beef income for steers is derived from subsidy, he added.
"Industry performance is accepted as being as good as its going to get. Irish beef producers and processors will lurch from one disaster to another. But processors agree extra value could be had from meat sales by improving quality and developing cuts for export.
"If gains in the beef sector are only worth £100 million/year, and half of that is achieved, it will still be more than profits from the processing sector for last year," he added.