Scheme offers dairy beef market guarantees

Jim Bergin, Chief Executive of Glanbia Ireland, Michael Creed TD, Minister for Agriculture, Food and the Marine and John Horgan, Chief Executive of Kepak Group. Picture: Finbarr O'Rourke

Glanbia Ireland and Kepak Group have announced the “Twenty20 Beef Club”, with a pilot year target of 6,000 calves, offering Glanbia

Ireland supplier dairy farms a guaranteed market for their heifers and steers, with a predictable and transparent pricing formula at the time of slaughter.

For Kepak customers and consumers, the Club offers a secure and predictable supply of high-quality beef with unrivalled traceability.

Over the coming years, Glanbia Ireland and Kepak have ambitious plans to rapidly expand the programme to 50,000 calves per annum.

In what is claimed to be a beef sector world-first, Glanbia Co-op has provided funding for the pilot phase to allow Twenty20 Beef Club members benefit from an advanced cash flow payment of up to €770 per animal (interest charge of 3.75%).

This optional component, administered by Finance Ireland, will pay a Club member €35 per animal per month from month three to month 24 (or sooner if the animal is slaughtered earlier).

Glanbia Co-operative Society Chairman Martin Keane said: “Uncertainty around pricing and cash flow have always been challenging for calf-to-beef producers.

“The Twenty20 Beef Club will also provide an outlet for native grain produced by our tillage farmer members and capitalise on Ireland’s Origin Green credentials”.

What farmers can participate?

The Twenty20 Beef Club is open to Glanbia Co-op members and current Kepak suppliers.

Members can be dairy farmers or beef finishers, with at least 25 calves required per farm (no maximum).

Suckler farmers that purchase dairy beef calves can also enrol qualifying animals bred and produced on their own farm that meet the Club criteria.

All dairy calves must come from Glanbia Ireland milk supplier farms.

Calves must be finished on the farm of birth (Glanbia farmers) or after one movement to a finishing farm.

All animal breeds with the exception of Jersey and Jersey crosses can be included.

What is the pricing formula?

Animals enrolled in 2019 and 2020 will be paid for at the average market price, plus a Club Premium of 15 to 25 cent per kg, and a Club Protocol Bonus of 12 c/kg.

In the event of a weak market price, Club members will benefit from additional price support.

There will also be a “seasonality” bonus to promote marketing of animals in April (+6c/kg), May (+10c/kg) and June (+6c/kg).

Members of the Club will also be eligible for Angus or Hereford breed bonus payments, which are guaranteed for the pilot phase at the point of entry.

At an average market base price of €4/kg, a Twenty20 Beef Club Angus steer slaughtered in April 2021 will qualify for a net price of €4.43/kg; at a market price of €3.75/kg, the same animal will qualify for a net price of €4.28/kg.

The market price and relevant bonuses are paid subject to carcase weights of 280-360kg.

What are the other main requirements of Twenty20 Beef Club members?

All relevant farm inputs consumed by Club herds will be sourced and supplied by Glanbia Ireland (GI).

GI and Kepak technical teams will provide farm support and nutritional advice to participating farmers.

Guidance on sire selection to optimise animal performance and eating quality, on meeting market requirements, and on slaughter timings, will be provided by Kepak’s agriculture team.

Members of the Club must strictly adhere to a defined rearing programme, jointly developed by Glanbia Ireland and Kepak.

Where the club scheme is oversubscribed, selection criteria will include trading history with GI and Kepak, and the animal genetics.

Glanbia Ireland and Kepak have set a number of economic and environmental performance targets.

What are the main ones?

  • A reduction in the average age at slaughter of Club cattle to 24 months on average.
  • A reduction in the average carbon footprint of Club farms through use of methane-reducing feed additives, lower average age of slaughter, improved feed conversion efficiency, reduced feed waste, and improved fertility across the herd.
  • An improvement in the eating quality attributes of the Club meat, achieved through better genetics, nutrition management, and optimum processing techniques.
  • An increase in the proportion of dairy bred cattle meeting market specified targets;
  • An increase in beef output and sales value per hectare, through farm efficiencies, breeding, feeding, grassland management, animal health/welfare, and slaughter preparation and selection.

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