National Beef Association Newslette r

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1 National Beef Association Newslette r THE INFORMATION AND OPINION IN THIS NEWSLETTER IS DISTRIBUTED FOR THE USE OF NBA MEMBERS. THE NEWSLETTER IS PUBLISHED BY NATIONAL BEEF SERVICES LIMITED. The Mart Centre, Tyne Green, Hexham, Northumberland, NE46 3SG Tel: info@nationalbeefassociation.com 18th December 2015: Issue 50 NBA NEWS: Directors Weekly Report: Ear Tag Testing for BVD Could Help Eradicate this Complex Disease 2 2 Farmers urged to take advantage of TB info grant 10 National Beef Association Appoints Northern Board Member 3 First meeting of beef expertise group has taken place. 10 NBA DIARY 5 Irish beef exports to the Philippines back on 2014 levels AHDB SBA NEWS: 5 Producer organisations in the beef sector to be legally recognised NBA MARKET REPORT 6 Rabobank: McDonald's to start sourcing verified sustainable beef in AHDB (Meat Services) and LMC market prices BEEF INDUSTRY NEWS: Badger Controls to Expand in Bovine TB Eradication Efforts 8 Keep the U.S. COOL 14 9 Advertisements 15 on 1

2 NEWS AND NBA DIRECTORS WEEKLY REPORT The NBA would like to take this opportunity to thank you for your support in 2015 and to wish you, and your families, a very Merry Christmas and a prosperous New Year has been a year of mixed fortunes for the beef industry, processors have had a good year, enough cattle for their needs, a strong Sterling so they could buy Irish beef cheaper and a stable retail price accompanying good demand. However the finisher has experienced poor prices, a shortage of store cattle, ever increasing penalties and less processor competition for their cattle. The focus has been on lighter carcasses and a move towards supplying nothing better than an R grade. Processors need to look beyond and aid farmers in developing markets rather than focusing on the whims of the retailers. To have a future for suckler production there needs to be a market for heavier carcasses allowing cattle to reach their true potential. Sustainable food production for an ever increasing population will need farmers to produce to the full potential and that includes finishing cattle. Giving the finisher no notice of changes to specification takes away any chance of being able to alter their business and get cattle to meet specification, this leaves us with one reason for the lack of notice it is a blatant attempt to keep taking value out of finished cattle has proven the need for an ombudsman to maintain fairness in the relationship between farmer, processor and retailer. Voluntary codes are weak and this year has shown they do not work in our sector, the first signatory was the first to break it, not all processors have signed up and we continue to see changes to specification without justification or notice. The NBA firmly believe we need an ombudsman and until that happens we shall continue to see the exertion of disproportionate power by the few over the many. Ear Tag Testing for BVD Could Help Eradicate this Complex Disease John Hoskins, Director of the NBA firmly believes that monitoring BVD with the use of tag tests has helped to make it easier to eradicate what is a very complex disease. He is keen to stress that elimination is an achievable target for all UK producers. When attached the tag takes a tissue sample for analysis, it can be used on any age of animal and John currently uses it primarily on his calves to identify and remove Pl s (Persistently Infected Animals). BVD currently represents one of the biggest economic drains to the UK cattle industry resulting in reduced fertility and higher levels of pneumonia and scour in calves. It is recommended that as part of the check, 9 to 18 month old animals should have a sample tested for BVD antibodies. At this age the animals will not have any maternal antibodies, therefore this test would highlight any positive results as a result of exposure to the virus. John explains this further from his own herd perspective: Ear tag tissue testing is so much easier than blood testing as I can do it myself rather than calling on the Vet. This really is a two minute job and tissue samples can be stored rather than sending them off straight away. I do believe that ear tag tissue testing for BVD either using official ear tags or button tags are making it easier for farmers to eradicate this disease. A real indication that BVD is evident in the herd will be lower than expected pregnancy rates, abortions, birth defects, low birthweight calves, poor calf health and calf loss between birth and weaning. 2

3 A Pl (Persistently Infected Animal) remains infected with BVD throughout its entire life. The persistent infection comes about as a result of foetal infection in the first 120 days of gestation. Primarily this occurs if the dam herself is Pl or, if a naïve dam becomes infected with the virus in early pregnancy. Pl calves cannot produce an immune response to combat the virus, consequently they shed virus for their entire life. Compounding the issue, a Pl calf has a negative impact on all of the surrounding calves. Even up to weaning there are indications that a Pl calf in the group will have a huge negative impact on the growth of the other calves. John goes onto say: If an antibody positive result is evident in your check list, it is a good idea to test all adult cattle for the virus rather than waiting to test the calves when they are born. It is then worth bleeding or ear tag testing the whole herd for virus in order to identify persistently infected animals and cull straight away. Detecting Pl animals and culling infected animals may be more costly in the short term but will prove hugely beneficial in the long term. There are many ways to search for a Pl animal in the herd and it is often best to start a Pl search with the calves and the young stock; however older animals within the herd can also be Pl s and should never be overlooked. Testing calves and young stock can also provide information about the BVD status of the dams from the respective calves. Any calf testing negative for the virus in tissue would indicate it is not Pl; the dam of the calf may also be regarded as not infected as Pl dams would always produce Pl claves. Any calves testing positive for the virus should be isolated and retested in 3 weeks, the dam should also be tested. It is highly recommended that if a Pl is found and culled, any calves born after that date should be tagged and tested at birth for an additional 12 month period in order to establish if there has been any lasting effect from exposure to the virus. Concluding, John says: If the breeding herd is virus negative it means that there is no adult persistently infected animal, however I would strongly recommend that farmers will need to ear tag tissue test the calves just to be certain that a Pl has not been born as it is possible for a dam to test virus negative and produce a Pl calf. National Beef Association Appoints Northern Board Member The National Beef Association has today announced the appointment of Northumberland Farmer William Walton to its Board. William, a member of the NBA, is the third generation of the Walton Family to have farmed Penpeugh Farm at Bardon Mill near Hexham in Northumberland. William s role will be to represent the North East region for the NBA, and as a board member he will be a voice for the industry and contribute to the board and their decision making. William farms the 450 acre typical Northumberland Hill Farm, near Hexham with his wife Fay and 18 year old son Ryan. William is a very well respected and noted beef and sheep farmer, Penpeugh farm is an upland unit, with a herd of 50 Suckler Cows including two stock bulls, a pedigree British Blue and a recently purchased Pedigree Beef Shorthorn, which will be put to the home bred British Blues. As many heifer replacements as possible are bred on farm, with only the occasional need to purchase stock. Most cattle are sold through either Harrison and Hetherington's Borderway Mart or Hexham and Northern, and in August last year they were awarded the Hexham and Northern Marts 19 th Anniversary Prize Show with a Limousin cross calf. William s overall aim is to produce good quality suckler calves and breeding females for replacements. Silage is produced on the farm, all concentrates; pulses and straw are purchased in, so in their breeding plan they want calves which will grow and fill out, from a good milk producing female, without having to purchase in expensive concentrates. 3

4 After leaving school William attended Kirkley Hall College. He is more than fully aware that the beef industry faces many challenges, and over the years to ensure that they are producing suckler calves to meet the ever changing demands of the consumer, they have changed their beef breeding from Galloways, to Aberdeen Angus and most recently to the British Blue. In taking up his role as a board member for the NBA William will proactively work with farmers throughout the Northumberland and the North East area, voicing and representing their views and thoughts on the future of beef farming in the region. On behalf of the NBA he will ensure that members are supplied with relevant information about the current topics under review and discussion. Commenting on his appointment to the NBA Board he said: I feel extremely honoured to have been invited to join the Board of the NBA and I am looking forward to this new challenge and working with the British Beef Industry. I will work hard to be a great ambassador and representative voice for beef farmers across the North East by both raising the profile of the NBA through its members, and keeping farmers fully informed about any changes and developments. From a regional perspective I would like to get more suckler cattle back on to the marginal and hill farms across the region, where the calves have to leave their farms at six to twelve months. William is also a very well respected farmer within the sheep industry. He is on the committee of the Blackface Sheep Breeders Association and has been for 30 years, was Vice Chairman for 2 years then Chairman for a further two years. He has also won the George Stephenson Memorial Trophy for the highest priced Blackface Ram in 2013 and then again this year, which was a personal best, achieving a sale of 13,000. The NBA plays a vital part in the British Beef Industry and Chris Mallon Chief Executive comments on the appointment of William Walton: We are delighted that William has accepted the invitation to join the Board. One of our key aims is raise the profile of the beef industry in his area, and William having lived and farmed in Northumberland all of his life brings a huge amount of knowledge, and will be instrumental in involving members of the NBA within the area, raising any issues they may have and enhancing the already great work that the NBA carries out within the industry sector. The NBA is recognised as the Beef Cattle Industry s consultative body and the voice for a wide range of beef related national industry committees which direct national beef industry policy. It is there to preserve and improve for the benefit of the public, the general standards of cattle, especially beef cattle, in the United Kingdom, by promoting and encouraging the breeding of beef cattle. 4

5 2015/6 NBA DIARY Friday 18th December OFFICE CLOSED FOR CHRISTMAS Monday 4th January OFFICE REOPENS Thursday 4th February Policy Meeting, Edinburgh Tuesday 8th March Tuesday 15th March Pedigree Breeders Committee Meeting, Newton Rigg College NBA Board Meeting, Hexham Friday 20th May BEEF EXPO, Bakewell Market Tuesday 14th June Policy Meeting, Welshpool Tuesday 21st June Board Meeting, Harper Adams College Tuesday 13th September Board Meeting, Hexham Tuesday 13th September NBA AGM, Hexham Tuesday 18th October Policy Meeting, Cullumpton Tuesday 6th December Board Meeting, Hexham Entries in Red are open to all NBA Members Entries in Green indicate Meetings attended by NBA representatives Entries in Blue indicate NBA Committee Meetings SBA NEWS Christmas is now only 7 days away, only one night of decent frost and temperatures higher than many days in this July with grass still growing, is this really winter? I hope that at least a few of you have received some of your 2015 Basic Payment. I hope you have filled in your application for the Beef Calf Scheme or fill do so before the closing date of 31 December. DON T leave it too long as it may take a while to fill in the form as some of the cattle software packages have not been upgraded to directly accept their list of eligible animal details. Finished cattle price are already on the slide despite BCMS data showing less month cattle around than a year ago. Numbers will be tight for at least the first half of 2016 especially with the higher volume of cull cows traded in the last 3 months. Numbers of 6 12 month cattle on the other hand are over 5% ahead of last year. They also show much higher numbers of 5

6 Beef crosses from the dairy sector. This is likely to see poorer prices for finished stock in the second half of the year meaning a lower price for stores this spring. NBA MARKET REPORT (written on Friday at 4pm) Cattle trade remains difficult and we are seeing no move upwards imminent. Cattle prices continue to come back and processors are not having to try hard to keep their chills full. The Christmas buying season didn t lift cattle prices and processors have enough in their chills to cope with any uplift in demand. It is likely that the early months of next year will see further weakening in the trade as we see the traditional post Christmas tightening of consumers belts and reduced demand. Over the last week I have had a lot of concern from members over grading at ABP and the results they are achieving from VIA grading, producers are inevitably finding that their grades are dropping and with it the value of their cattle. Concerns have been around the calibration of the imaging machines and their accuracy. It is hoped ABP deal with producers concerns before confidence in their grading system is further hit. It is rumoured that St. Merryn will be bringing in a new grid and payment system in January not much notice for suppliers to change their business. Interestingly Dunbia have decided to look for a buyer and we shall see how it goes, however it is imperative that it remains outside of the control of any of the other UK players. Northern Ireland producers have been disappointed with the trade over the past year and it is disappointing to note that nearly all the catering trade and 95% of the butcher trade in NI with the exception of those killing their own cattle, are sourcing their beef from the ROI. So in NI if you went out for a steak in a restaurant in Belfast the chance of getting an NI steak is very slim indeed. We are now finding that secondary processors who would normally have purchased beef from NI processors for further processing, are now purchasing ROI beef out of ROI meat plants and processing it in Northern Ireland. This beef is then making its way into NI supermarkets processed in NI and reared in ROI. It is disappointing that firms who made their reputation on the backs of Northern Irish beef are not supporting the home product now. For the week ended the 12 th December the GB all prime deadweight average was back 4p to 337.8p/kg. In the last few weeks the price has now fallen 6p/kg and this during the season when we usually expect the price to rise. We are now at least 16p/kg behind last years trade. Overall steers averaged 339.3p/kg, down 5p on the week, while those meeting R4L specification eased 3p to 351.3p/kg. At this price steers meeting the target spec achieved just below the previous five year average for the first time since mid May. Heifers did a little better, the overall average was back 3p at 340.4p/kg while R4L s were down 2p to 350.8p/kg. In contrast, the average young bull price actually moved up a penny to 314.2p/kg, however R3 young bulls were still back 3p at 314.2p/kg. For another week, cow prices came back as demand remained seasonally slow. The O4L average fell another 2p on the week to 212.9p/kg. Over the Christmas and New Year demand for manufacturing beef on the continent is affected by the closure of some processing facilities. However, in contrast to the prime market the New Year generally offers improved prospects for the cow trade. Imports of beef into the UK in October were back 13 per cent on last year at 21,000 tonnes, according to the latest trade data from HMRC. Shipments from Ireland were down 18 per cent 6

7 year on year at 13,700 tonnes. This fall was largely a result of lower imports of boneless fresh chilled product. Shipments from the Netherlands were unchanged, compared to October 2014 at 1,600 tonnes. Imports from Poland were up almost a quarter year on year to 1,300 tonnes. Imports from Poland still constitute only a very small proportion of UK import requirement. The relationship between the euro and sterling continues to play a role in the competitiveness of the UK market, in particular for other EU importers. In the year to date, imports are up over eight per cent on the year, entirely attributed to more product coming from other member states. Demand for beef has remained disappointing on the continent so far in 2015 with the notable exception of Germany. There have been lower household purchases of beef year on year in France, Spain and Italy, this is despite the lack of any retail price inflation other than a marginal rise, of less than one per cent, in Spain. France is the largest beef market in the EU and volume purchases of cuts were down two per cent on the year. Frozen ground beef purchases were almost one per cent lower, whereas fresh ground beef showed a healthy four per cent increase. Improving demand for beef is vital if the cattle market in the EU is to improve next year. The average R4L steer price in GB came back again and is averaging 351.3p/kg back 2.9p on the week, Scotland is at 361.5p/kg back 4.6p/kg, the South are averaging at 339p/kg a change of 1.8p/kg, the North is up 0.7p and averaged 356.6p/kg, the Midlands have an average of 338p/kg 5.6p on for the week. Northern Ireland steers are at 315.6/kg back 4p/kg on the week and the ROI is up 5.9p in sterling terms at 274.6p/kg. The average R4L heifer price in GB is back 2p/kg and averaged 350.8p/kg. The R4L heifer price in Scotland is back 3.7p/kg at 362.7p/kg, Midlands averaged 341.9p/kg back 1.1p/kg, the North is back 0.4p/kg on the week averaging 351.5p/kg, Southern England heifers are back 2.3p/kg and averaged 338.7p/kg. Northern Ireland heifers are back 7.9p/kg at 312.4p/kg and ROI heifers are up 5.5p/kg in sterling terms to average 287.2p/kg. Cattle imports from the Republic of Ireland for direct slaughter in Northern Ireland plants last week were fairly similar to the previous week with 368 prime cattle and 81 cows imported. In the corresponding week in 2014, 628 prime cattle and 134 cows were imported from ROI for direct slaughter. Exports from NI to ROI for direct slaughter last week consisted of 19 prime cattle and 226 cows, this was a decrease from the 54 prime cattle and 311 cows exported during the previous week. Exports from NI for direct slaughter in GB last week consisted of 309 prime cattle and 116 cows which is the highest weekly export of cows to GB this year. For the coming week in the South of England, we are seeing cattle being quoted from 336p/kg. While in the North, base prices quoted for next week are in the region of 352p/kg. The Scottish price remains above the rest of GB, Scotland is seeing cattle being quoted from a base of 360p/kg. In Northern Ireland processor, prices quoted are around 314p/kg based on U3 for the coming week. Angus, Shorthorn and Hereford native bred cattle continue to attract strong premiums of 20p depending on the scheme. Cows remain in the region of 215p, with more for better fleshed cows with good conformation. 7

8 AHDB (Meat Services) and LMC market prices: Week Ending 19/12/2015 Last Week s GB R4L steer average was 351.3p/kg. The overall cow average was 192.1p/kg Auction Averages Week Ending 16/12/2015 Price p/kg lw p/kg change on wk STEERS HEIFERS YOUNG BULLS COWS DeadWeight Cattle Prices (p/kg) Week ending 12/12/2015 GB SOUTHERN CENTRAL NORTH SCOTLAND N. IRELAND ROI R4L Steer p/kg change on wk R4L Heifer p/kg change on wk R3 Bull p/kg change on wk O+3 Cow p/kg change on wk All GB data in the above tables is reproduced from tables created by AHDB/LAA/IAAS For more detailed information please visit or * The above tables are unique because they are the only ones in existence that are published on a cross UK basis that carry information on all UK regions plus the Republic of Ireland. The information, which is delivered free to NBA members by , can only otherwise be obtained through AHD/LAA/IAAS (see above) and the Livestock and Meat Commission s (LMC)Bulletin for Northern Ireland. The tables should be a useful source of information to committed beef finishers across the UK. 8

9 BEEF INDUSTRY NEWS Badger Controls to Expand in Bovine TB Eradication Efforts Secretary of State for Environment, Food and Rural Affairs, Liz Truss, updated Parliament yesterday on the state of bovine tuberculosis eradication efforts in the UK. She said: "The strategy is delivering results with more than half the country on track to be officially free of the disease by "Badger control operations in Somerset, Gloucestershire and Dorset were all successful in meeting their targets... As part of our strategy the Government wants to see badger control over a wider number of areas next year. This is in line with the UK Chief Veterinary Officer s advice on what is needed to realise disease control benefits at regional level." The government's plan involves strengthening cattle testing and movement controls, improving biosecurity on farm and when trading, and badger culling in areas where TB is rife. A badger vaccination programme has had to be suspended due to a worldwide shortage of vaccines, but research into new cattle and badger TB vaccines continues. Ms Truss said similar strategies had worked in other countries including Australia and New Zealand, and was supported by the country's chief vets. But British Veterinary Association (BVA) President Sean Wensley said there is little evidence for an expansion of culling. He said: While we continue to support targeted, effective and humane badger culling as a vital element of the btb eradication programme, we remain disappointed that Defra plans to continue using controlled shooting and roll it out to new areas, given that the first two years of culling in the pilot areas failed to demonstrate conclusively that controlled shooting could be carried out effectively or humanely based on the criteria that were set. "Again, we urge the Government to reconsider this policy and extend badger culling using cage trapping and shooting only. We also raised concerns about the proposals to relax the licence conditions in relation to the duration of the culling period. It is disappointing that the revised guidance to Natural England is not clearer that a simultaneous and intensive culling operation is the primary goal and does not define this. The primary goal must be to cull as many badgers as possible in as short a time as possible, in order to minimise the possible risk of perturbation." However, Mr Wensley welcomed strengthening of some other measures used to combat TB. We welcome the strengthening of some of the tools we need to eradicate btb, including the campaign to step up biosecurity measures in farms and in the cattle trade. We also welcome the announcement of new cattle controls, such as post movement testing, but we are disappointed to lose the BCG vaccine from the toolbox with the temporary suspension of the Badger Edge Vaccination Scheme (BEVS). "In light of the global BCG shortage, it is right that public health takes priority but it is regrettable that the supply chain is so vulnerable and we would want to see more security in the future. The NBA would like to pay tribute to the cull companies and contractors in all three areas who worked extremely hard to ensure a difficult job was carried out as safely, effectively and humanely as possible. It is clear that lessons have been learned from the first two years of the pilot culls and these have helped ensure the success of this year s operations. The desire to see culling carried out over a wider area of the country next year will be welcomed by farmers in areas where bovine TB is rife and where culling can play a vital role in disease control. We will continue to offer help, advice and support to farmers who want to apply for a cull licence in areas where the disease is endemic and that would benefit from culling. 9

10 Farmers urged to take advantage of TB info grant Farmers should consider the potential TB risks animals could pose before they are purchased, Deputy Minister for Farming and Food, Rebecca Evans has said. Earlier this year the Welsh Government launched the Informed Purchasing grant, to make it easier for farmers to know the TB history of the herd of origin of any animals they are considering purchasing at a market. The grant helps markets to purchase equipment, such as display boards and screens, where the TB information of the animals they are selling can be displayed. The Deputy Minister has encouraged livestock markets to take advantage of the grant: There are a number of simple steps farmers can take to help protect their cattle from possible infection, starting with asking for the disease and testing history of an animal and the herd it comes from when making purchasing decisions. To support this we are providing grant support to help livestock markets upgrade their facilities to allow TB information to be prominently displayed. The Informed Purchasing grant closes on the 31 December, So I encourage any markets who haven t applied yet to do so to. Peredur Hughes Chair of the Animal Health and Welfare Framework Group said: Good biosecurity and health planning will reduce the likelihood that cattle will become infected with TB and other diseases. Buying cattle from herds with a history of the disease may represent more of a risk than buying cattle from herds that have not had TB for a number of years. Farmers should always ask about the TB history of the herd of origin and consider the risk the animals may pose and the precautions they should take before purchasing them. The Welsh Government is offering to fund 50% of the cost for markets to upgrade their facilities, up to a maximum of 2,500. The application window closes on 31 December First meeting of beef expertise group has taken place. A group of beef industry consultants and advisers have got an in depth insight into herd performance and selecting cattle for slaughter, thanks to a new initiative from AHDB Beef & Lamb and the British Institute of Agricultural Consultants (BIAC). The first meeting of the Developing Beef Expertise programme, which took place earlier this month in Lancashire, involved 16 consultants and advisers from across the industry. The two day event, which included a visit to Rowntree Farm near Clitheroe followed by a Live to Dead day at Dunbia, Sawley, also provided an opportunity for the group to network with others with an interest in beef production. Between them, the group have over 200 years experience of working with farmers. However, they are still keen to develop their skills to improve their advice to producers and improve their awareness of AHDB Beef & Lamb s resources. Dr Liz Genever, Senior Beef and Sheep Scientist at AHDB Beef & Lamb, said: Currently only 10 per cent of beef producers use professional technical support in the form of consultants and advisers. This figure is likely to increase as more producers look to external support to improve their business efficiency and their ability to deal with price volatility. This is the first time AHDB Beef & Lamb has worked actively with a group of consultants and advisers in this way. The aim is that, equipped with the right knowledge, skill and resources, the 16 consultants and advisers will continue to help their clients improve their businesses, with an increased awareness of the work we do. Feedback from the initial meeting was positive, Charlotte Johnston from Innovation for Agriculture said the workshop was a great way to learn about the work AHDB Beef & Lamb do and the resources they have available. I have taken away valuable information from the first session which will be useful for my business and that of my clients. 10

11 A further four, two day workshops will be held in 2016 covering topics such as feed efficiency, bull selection, grass and forage, health and building design. The final workshop in December will look at rationing and feeds. Following on from the success of the beef group, the intention is to establish a similar programme for sheep consultants later in More information about the programme can be found on the AHDB Beef & Lamb website. Irish beef exports to the Philippines back on 2014 levels AHDB Irish beef exports to the Philippines in the first nine months of 2015 totalled 2,200t, according to the AHDB. However, this is down considerably on last year s levels when Ireland sent 5,000t of beef to the Philippines from October to December, it says. Despite quantities from Ireland appearing to be relatively small, outside of the EU, the Philippines is Ireland s largest market for beef, while Ireland is the Philippines fourth largest supplier. However, despite these exports to the Philippines in 2015 being quite disappointing, it says that Philippine imports last year recovered to levels not seen since According to the AHDB, this was largely driven by supplies from India and Australia with both countries supplying and extra 24,000t in 2014 compared to These increased supplies occurred during a period when domestic production in the Philippines had been steady, producing more than 400,000t of beef in 2014 which is up 7% on 2008 levels. However, it indicates that concerns have been raised that suggest that the government is favouring domestic production by imposing stricter laws to raise import costs and to protect domestic production. According to the AHDB, the opportunity in the Philippines is believed to be twofold. Firstly, there is the suggestion that access has the potential to open up other markets in the region. Secondly, it says, improved economic performance has encouraged Filipino consumers, who traditionally have been known to lead a somewhat frugal existence, to start to spend some of their new found wealth. GDP per capita has increased by almost 37% between 2005 and 2014 while the population has also grown by 1.5% in the last decade. According to the AHDB, the Philippine economy continues to grow and it will present increased opportunities for exports of beef from lots of regions. However, EU beef could be challenged in a number of ways. Not only by competitively priced beef from countries such as Brazil but also the burden of red tape for a place at the table. Irish producer organisations in the beef sector to be legally recognised A major outcome of this week s Roundtable was the confirmation from the Minister that he is to legislate to give formal recognition to Producer Organisations in the beef sector for the first time. "This has been one of the key outcomes of last November s Roundtable agreement and marks an historic breakthrough for Irish beef farmers who now for the first time will have a legal framework allowing for negotiation directly with factories on price as a group," said Minister for Agriculture, Simon Coveney, who chaired the seventh meeting of the Beef Roundtable on 16 December. "As we have seen from other sectors, Producer Organisations (POs) can greatly help to rebalance the supply chain by strengthening the hand of producers who will now have a structure for negotiating collectively. They also provide a vehicle for negotiating cheaper inputs as well as acting as knowledge transfer outlets for their members. In addition to legislating for their recognition which I will do before the end of the year I have also committed 11

12 to funding a network of facilitators who will assist interested farmers in establishing these groups. I will be announcing further details on this early in Coveney believes that the seventh meeting of the Beef roundtable has delivered much greater transparency to the sector and have delivered on a number of key targets which even twelve months ago seemed difficult. "Of course we do not have universal agreement on all issues and there will always be new issues to be faced but we have a forum which allows for open and honest discussion between all sides and allows for consideration of trade, climate and other strategic issues impacting on the beef sector in Ireland," said Coveney. "It is critically important to maintain this strategic focus, but of course this does not obviate the need for continuing, frequent and open engagement between processors suppliers on market issues. A number of developments have occurred in the beef industry since the conclusion of the November round table agreement. Coveney highlighted some of the actions he has taken since then. "Today for example I confirmed that my Department is making an adjustment to its AIM system so that the number of farm residencies of each animal is even clearer when presented for slaughter," said Coveney. "There were discussions on certain aspects of customer specifications for beef on which there continues to be some disagreement and I urged the parties to remain in contact to try and resolve these market issues. I reminded the processors in particular of their obligation to provide timely notice of changes to market specifications." On the issue of transparency the Minister said that his Department had introduced significant upgrades to the Department s Beef Pricewatch App which now allow for price comparisons between factories across five grades of each animal as well as bringing together each week the number and weights of animals slaughtered in each grid category. "Improving price transparency has been one of the key goals of the Roundtable from the outset and the Beef Pricewatch App has transformed price transparency for sellers of cattle and since its launch earlier this year is averaging over 1,000 hits per week," said Coveney. "It has become the price comparison tool of choice for farmers here and marks our beef sector as the most transparent in the EU in terms of price information available. We are constantly reviewing it and the upgrades announced today will make it even more user friendly and add new layers of information to further improve transparency. The Roundtable today also received presentations from Bord Bia on the market outlook for the sector and from Animal Health Ireland on its plans for initiatives in beef health. Teagasc also updated on the publication of its production blueprints for farmers since the last meeting of the Roundtable. Rabobank: McDonald's to start sourcing verified sustainable beef in 2016 McDonald s will start sourcing verified sustainable beef in With McDonald s buying less than 2 percent of the world s beef, the restaurant chain s move is viewed as more symbolic than structural, Rabobank analysts said. But it does signal beef s move into the consumer trend for sustainably produced food, the analysts said in Rabobank s Global Beef Quarterly 4Q report released Monday. McDonald s along with major beef players JBS, Cargill and Walmart have supported the Global Roundtable for Sustainable Beef, as well as some other regional sustainable beef initiatives. And 2016 should reveal which other companies follow suit, said analysts with Rabobank, a global financial services provider for agriculture and agribusiness. The U.S. and China will be the main import markets to watch in 2016, the quarterly report said, also identifying Australia, Brazil, India and the U.S. as the key exporters to watch in particular the supply of cattle and beef in response to rebuilding pressures at different points in the cycle. 12

13 Factors creating large amounts of uncertainty and volatility in the U.S. in the second half of 2015 are expected to ease in 2016, analysts forecast in the report. Despite a slowing economy, China should continue to play a critical role in the global beef market, analysts said. The introduction of live cattle trade for slaughter or feeding in China provides domestic players the opportunity to offer imports as fresh chilled beef to retail markets, claiming a premium over traditional imports of frozen meat, Angus Gidley Baird, senior animal protein analysts for Rabobank, said. New provinces and players in China will join live cattle imports in 2006, analysts predicted, although volumes will be restricted by low cattle availability from Australia, the report said. Other highlights from the report: * Brazil is expected to access the U.S. fresh beef market in 2016, which not only would provide access to the U.S. but would also facilitate entry to other markets. Overall, Brazil is expected to increase exports by about 6 percent in * Likewise, Argentine beef exports are expected to enter a growth cycle, with the potential for significant export increases starting in * After consecutive years of record production and exports, Australian cattle supplies tightened considerably in October and November. Reduced herd numbers coupled with continuing dry conditions suggest slaughter numbers could drop 15 to 20 percent in the coming year, with exports sliding by 20 percent. Still, Australia remains the biggest beef supplier to China. * Total shipments of Canadian cattle to the U.S. year to date are down 31 percent compared to last year. * The 2016 outlook remains generally positive for the European Union, with domestic beef consumption expected to be up 1.3 percent in 2015 and EU exports forecast to increase an estimated 7.5 percent by year s end. In the U.S., huge daily price swings in the futures market and wild corrective swings are making basis calculations difficult and price discovery uncertain, the report said. Looking ahead, ongoing herd rebuilding will maintain tight supplies in 2016, with prices expected to remain firm, analysts said. 13

14 Keep the U.S. COOL Now that the World Trade Organization has ruled against the U.S. law that requires beef, pork and chicken labels to show country of origin, powerful agri business organizations are pushing for Congress to quickly repeal the law. However perhaps Congress should do what Rod Gray of Harrison, who represents Nebraska on the board of the U.S. Cattlemen s Association, suggested last month. Congress should make the labeling program voluntary, rather than mandatory. The issue remains the same, consumers want to know more, not less about their food, Gray wrote. Making the labels voluntary would retain the integrity of the COOL program, Gray wrote. Only beef from cattle born, raised and processed in the U.S. could be called U.S. Beef. U.S. Secretary of Agriculture Tom Vilsack said the change would enable U.S. producers to escape $1 billion in retaliatory tariffs that the WTO said could be imposed next year by Mexico and Canada. In general terms the COOL program is supported by consumer groups and many cow calf ranchers. It is opposed by meatpackers and food companies. A bipartisan bill to make the labeling program voluntary has been introduced by Sen. John Hoeven, R N.D., and Sen. Debbie Stabenow, D Mich. But big agri business giants including the National Cattlemen s Beef Association, the National Pork Producers Council and the National Milk Producers Federation, which have already spent millions fighting COOL, are trying to use the possibility of retaliatory tariffs to panic Congress into inserting repeal of COOL into a giant omnibus spending bill that congressional leaders are trying to wrestle to passage before the end of the year to avoid a government shutdown. That s a sloppy way to govern. Congress should be able to get its act together to consider issues in a more thoughtful manner. It s disappointing that Reps. Adrian Smith and Brad Ashford earlier this year were in the majority that approved a House bill to repeal COOL. Rep. Jeff Fortenberry had the right idea. If you know where your shirt comes from, then you should know where your food comes from, Fortenberry said. Polls show that the COOL program continues to have widespread consumer support. There s little doubt that consumer support will remain strong as globalization continues. American beef has a well earned reputation for quality. The same cannot be said, for example, of pork from China or chicken from Mexico. Retaining the COOL program on a voluntary basis will mean that the USDA will monitor the industry to make sure that other countries are not slapping a U.S. label on their products. Consumers deserve that assurance. 14

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