Potential for the Formation of a Beef Co-Op.

Nettleman

Mod: This thread is a split off of the Beef In Crisis thread, as requested.

rangler1 wrote: »

Our lamb producer group works very well, unfortunately it follows the market, but we'd be getting the top market price,
We work with the factory helping with promotions, we have a guy coming from England next month to look at the factory and look at our stock to see can we do things better.
Really pleased that the glut of lambs that came in the last two months didn't floor the price, a huge amount of extra lambs killed and I don't think we're that much under last year.
We're paid on grade and quality, You know the specs that the market wants, but how could any group deal with a crowd that carries on like the beef factories, they can't seem to commit to specs a month ahead, never mind negotiate anything at the beginning of the year.
Farmers should get together to form a group, and try to work with the factory, even a commitment to take the groups stock weekly like we have with the lambs would have been a huge help this year

I think we have a lot to learn from the sheep men, but also the dairy men who setup co-ops to market their milk, and didn't allow private barons take control of the market for their produce and weaken their hand, and untimatly their livelihoods

Username John

Nettleman wrote: »

I think we have a lot to learn from the sheep men, but also the dairy men who setup co-ops to market their milk, and didn't allow private barons take control of the market for their produce and weaken their hand, and untimatly their livelihoods

Is the day for a meat / beef co-op gone? (In that we have gone so far away from it being practical to set one up, in terms of potential profit vs setup costs)

Nettleman

Username John wrote: »

Is the day for a meat / beef co-op gone? (In that we have gone so far away from it being practical to set one up, in terms of potential profit vs setup costs)

Right, here goes my rant.....I happen to know about Agri Coops, and imo, they need to have good oversight, led from the top, and a culture of integrity, be seen to be assessable and they can become a voice for farmers on the national stage over time. This is easier in a new setup situation. If profit is made, some reinvested, and rest should be used to reduce costs to farmers, but make sure the coop is strong for your farmers shareholders. It also needs to be driven by one goal and one goal only, to serve the best interests of its farmer members. It will need a rock strong farmer power base which is unshakable. A lot of the vested interests who are making money from current system would crap them selves at this prospect- The recent protests tell me that the 100,000 beef farm familiies in this country are switched off, disengaged, and are fedup. They wont help IFA protest. Theres such a large pool of beef farmers, and you would only need about 20% of them to contribute initial startup capital to get starter money. Do you open your own factory, (not as complicated as some might think), do you open a farmer factory portal, where member stock are all funnelled through that portal, and factories usual procurement policy of divide and conquer becomes weakened. If Authorities drag their heels on your IPPC liciences and various permissions, you will never get off the ground, but with an election next year, the farmer shareholders could hold strong election cards. The existing players would immediately put their cattle price up by €2/kg to put the coop out of business before it even starts, so farmer support would have to be strong, and not fall into that trap. Afterall, if coop members put their own money into it, they should protect their investment and support their coop. We have all lost a fortune in beef over last few years and starter capital is not much when farmers do their accounts for 2014 and see how much money they have lost to current regime. Now, I can answer any questions or concerns people may have on this idea, and its just an idea. There are coops which lost their farmer support, and they crashed and burned overnight. Is this subject important enough for a new thread? "New beef farmers coop"?

sandydan

Nettleman wrote: »

I think we have a lot to learn from the sheep men, but also the dairy men who setup co-ops to market their milk, and didn't allow private barons take control of the market for their produce and weaken their hand, and untimatly their livelihoods

i seem to remember a certain coop being taken over by Larry Goodman and its some of its assets sold off as result, a number of farmers were shouting from the rooftops that was way to go, next best was Denis Brosnan of Kerry Coop a man who revolutionized dairy industry in Kerry from fragmented coops all over the county, he was according some farmers, allegedly, regarded as too young to lead industry. i think farmers in general have learned a lot about good managers Vs private ownership in charge of dairy industry .
however i believe they as any organisation are not capable of dealing face to face with professional negotiators of Beef Factories, they are professionals, and salaries paid to them reflect their skill in talking down to farmers and other suppliers while negotiating best deal for factories in sales agreements etc. in essence until farm organisations stand back and set the terms of reference and hire on contract a team of professionals to match those of factories and negotiate prices and contracts on farmers behalf for those factories and/or export markets, farmer negotiators will always play second fiddle and the blame game and bickering that follows is playing right into factory hands imo politicians are aware of this,but play the game at conferences and announcing pseudo schemes to"improve Irish beef" which is best in world already ,but have effect of tying up farmers in mountains of paperwork with no benefit at end of day and end effect is subsidies are what farmers survive on not the profit from a farmer enterprise.

Damo810

Nettleman wrote: »

Right, here goes my rant.....I happen to know about Agri Coops, and imo, they need to have good oversight, led from the top, and a culture of integrity, be seen to be assessable and they can become a voice for farmers on the national stage over time. This is easier in a new setup situation. If profit is made, some reinvested, and rest should be used to reduce costs to farmers, but make sure the coop is strong for your farmers shareholders. It also needs to be driven by one goal and one goal only, to serve the best interests of its farmer members. It will need a rock strong farmer power base which is unshakable. A lot of the vested interests who are making money from current system would crap them selves at this prospect- The recent protests tell me that the 100,000 beef farm familiies in this country are switched off, disengaged, and are fedup. They wont help IFA protest. Theres such a large pool of beef farmers, and you would only need about 20% of them to contribute initial startup capital to get starter money. Do you open your own factory, (not as complicated as some might think), do you open a farmer factory portal, where member stock are all funnelled through that portal, and factories usual procurement policy of divide and conquer becomes weakened. If Authorities drag their heels on your IPPC liciences and various permissions, you will never get off the ground, but with an election next year, the farmer shareholders could hold strong election cards. The existing players would immediately put their cattle price up by €2/kg to put the coop out of business before it even starts, so farmer support would have to be strong, and not fall into that trap. Afterall, if coop members put their own money into it, they should protect their investment and support their coop. We have all lost a fortune in beef over last few years and starter capital is not much when farmers do their accounts for 2014 and see how much money they have lost to current regime. Now, I can answer any questions or concerns people may have on this idea, and its just an idea. There are coops which lost their farmer support, and they crashed and burned overnight. Is this subject important enough for a new thread? "New beef farmers coop"?

Yes, maybe a mod could split the above post off into a new thread?


Mod: Agreed, and done.

sandydan

Username John wrote: »

Is the day for a meat / beef co-op gone? (In that we have gone so far away from it being practical to set one up, in terms of potential profit vs setup costs)

can any anyone explain what happened at Mitchelstown , it was regarded as main outlet for many pig producer big and small ,with many viewing it as one step short of setting up or taking over a beef plant to rival any other with marketing skills to match.
however what i seem to remember next on everyone's lips is how are we to know Irish bacon in their wrapping from imported, was it case on no pig supplier shareholders or Coop structure being diluted, or too much power given to one financial controlling interest ie quick profit

Nettleman

sandydan wrote: »

can any anyone explain what happened at Mitchelstown , it was regarded as main outlet for many pig producer big and small ,with many viewing it as one step short of setting up or taking over a beef plant to rival any other with marketing skills to match.
however what i seem to remember next on everyone's lips is how are we to know Irish bacon in their wrapping from imported, was it case on no pig supplier shareholders or Coop structure being diluted, or too much power given to one financial controlling interest ie quick profit

Not sure about this case in Mitchelstown, but my idea would involve farmers beef going into a farmer factory, and sold to Butchers or packaged and sold online-from marketing point of view, its got appeal to irish consumer, support your local farmer who rears and packages your meat, brings the farmer up the food chain, as opposed to private barons moving back the food chain into feed lots. If you ask an irish housewife would she buy beef from a farmer controlled irish coop, which is supplied by irish beef farmers or from a butcher who buys from well known privately owned beef barons, I think its a no brainer. Butchers could also buy from this coop to genuinely promote irish beef farmers interests, not like stuff currently being peddled on irish TV ads, which benefits private businesses, & no bonus for farmers

Mac Taylor

Nettleman wrote: »

Not sure about this case in Mitchelstown, but my idea would involve farmers beef going into a farmer factory, and sold to Butchers or packaged and sold online-from marketing point of view, its got appeal to irish consumer, support your local farmer who rears and packages your meat, brings the farmer up the food chain, as opposed to private barons moving back the food chain into feed lots. If you ask an irish housewife would she buy beef from a farmer controlled irish coop, which is supplied by irish beef farmers or from a butcher who buys from well known privately owned beef barons, I think its a no brainer. Butchers could also buy from this coop to genuinely promote irish beef farmers interests, not like stuff currently being peddled on irish TV ads, which benefits private businesses, & no bonus for farmers

Nettleman, I agree with some of what you are saying, but the issue is still that we export ~90%. The availability of markets for a premium product to me is a bigger issue. Their is no incentive on the factories to go out and get new business as they like the stores make their margin regardless where they sell. Beef consumption is down, how many here now have a weekly roast beef dinner?

ganmo

Nettleman wrote: »

Not sure about this case in Mitchelstown, but my idea would involve farmers beef going into a farmer factory, and sold to Butchers or packaged and sold online-from marketing point of view, its got appeal to irish consumer, support your local farmer who rears and packages your meat, brings the farmer up the food chain, as opposed to private barons moving back the food chain into feed lots. If you ask an irish housewife would she buy beef from a farmer controlled irish coop, which is supplied by irish beef farmers or from a butcher who buys from well known privately owned beef barons, I think its a no brainer. Butchers could also buy from this coop to genuinely promote irish beef farmers interests, not like stuff currently being peddled on irish TV ads, which benefits private businesses, & no bonus for farmers

Would they? are the irish housewives the main market?
the 30somethings might be a better market if going for online sales. and if you look up the 'miserible farmer bastards' thread and you'll see the joe public don't hold farmers in the same regard as we'd hope.

some butchers already have agreements in place with local farmers(or have their own animals) but they are business men and if they see that there's something good gonna come from it they'd be on board.

there'd be no bother in selling the hind quarters but the fore quarter is harder to shift

Nettleman

Mac Taylor wrote: »

Nettleman, I agree with some of what you are saying, but the issue is still that we export ~90%. The availability of markets for a premium product to me is a bigger issue. Their is no incentive on the factories to go out and get new business as they like the stores make their margin regardless where they sell. Beef consumption is down, how many here now have a weekly roast beef dinner?

I have heard that argument put forward recently (mostly by MII), and i suppose i wonder of the 68,000 cattle slaughtered in the last 2 week, how many will still be in processor freezers in a fortnights time? very few. This new venture will not initially control 100% of irish cattle (regulators wouldn't allow it anyway), but I suggest it focus irish consumer first, and build support at home, lower transport costs serving your own market, remember, we are cutting out a middleman here, and they are currently making margin which has being extracted from farmers recently. Spoke to a restaurant owner last week, and suggested he must be buying his steaks for nothing now, but he told me his processor supplier has put striploins up in price...!! You wont conquer foreign lands in the first year, build on the goodwill of your own countrymen and housewives first.

Nettleman

your right Mac, First job is to get some serious market research, if im wrong about the target market, then strategy should change. If IFA commission research of say 5,000 irish shoppers, and ask the question, lets look at the results, and decide accordingly. If IFA wont do that, well that speaks volumes. Forget IFA and EIF, Rangler has convinced me that road is closed. All i would say is that I would be pushing/suggesting no EIF levy in this coop, however if the IFA or cattle breeding societies wanted to put in capital to support their own farmer members in a beef coop enterprise, then that would be ok, but coop would likely be one man one vote. This is quite normal under coop/society rules. Indeed ICMSA will likely want an outlet for the dairy men males, but lets not get off tangent, this thread is about beef farmers, not dairymen. Society rules would have to be drafted, agreed and ratified

Damo810

Will read this topic later, but who would buy meat online, especially if they don't know the owner(s)? We'd be far better off trying to develop and brand and get it in the supermarkets or butchers, no? A bit like Truly Irish in pork.

ganmo

could the beef coop get the 10% home market?
it is fairly fractured you have the 1) butchers, supermarkets selling uncooked cuts and mince
2) restaurants and catering companies selling cooked meals
and then the 3) secondary processors making cooked meats for lunches and ready made meals.
(did i miss out a sector?)

would you be happy with some of the supermarket business, a good chunk of butchers and restaurants, and none of 3?
3 don't care about meat quality or source or even species it would seem.

would that be about 3% of the total market?

Nettleman

Damo810 wrote: »

Will read this topic later, but who would buy meat online, especially if they don't know the owner(s)? We'd be far better off trying to develop and brand and get it in the supermarkets or butchers, no? A bit like Truly Irish in pork.

Not fixed on any one idea, we are discussing it here, thinking re online as a way to connect with the end consumer, if they pay transport you are going from start of calf birth to final consumer, and farmer is there all the way, do we operate in 3rd party transport for trade and retail customers, and drive our bone-in or deboned meat to all butchers and retailers in Ireland-maybe. If margin from boned out is not worth it, well then don't employ butchers in the factory and forget about a boning hall, and just sell your "big bits" to the trade. 5th quarter is another area which is a total secret, and farmer gets paid zero for it. There are irish customer here for that, and they are importing lungs, hearts etc from abroad.

LivInt20

Something written lately in the Farmers Journal.

Is it time for an “Irish Beef Board”?

http://www.farmersjournal.ie/farmer-writes-is-it-time-for-an-irish-beef-board-163813/

Nettleman

ganmo wrote: »

could the beef coop get the 10% home market?
it is fairly fractured you have the 1) butchers, supermarkets selling uncooked cuts and mince
2) restaurants and catering companies selling cooked meals
and then the 3) secondary processors making cooked meats for lunches and ready made meals.
(did i miss out a sector?)

I no salesman, but from what i understand most of the 90% goes to the uk. they speak our language, and buy irish beef. Personally, and again this may be wrong, going after the big volume multiples will crush your business before it starts. Start off small, make a profit, built on that. Don't race before ya walk, or ya just fall over bust

rangler1

Nettleman wrote: »

your right Mac, First job is to get some serious market research, if im wrong about the target market, then strategy should change. If IFA commission research of say 5,000 irish shoppers, and ask the question, lets look at the results, and decide accordingly. If IFA wont do that, well that speaks volumes. Forget IFA and EIF, Rangler has convinced me that road is closed. All i would say is that I would be pushing/suggesting no EIF levy in this coop, however if the IFA or cattle breeding societies wanted to put in capital to support their own farmer members in a beef coop enterprise, then that would be ok, but coop would likely be one man one vote. This is quite normal under coop/society rules. Indeed ICMSA will likely want an outlet for the dairy men males, but lets not get off tangent, this thread is about beef farmers, not dairymen. Society rules would have to be drafted, agreed and ratified

actually have a resolution gone up from our county this week proposing a survey on beef taste in different ages of cattle....see how far it gets.., It's going to livestock committee, so I'll have nothing to do with it
Was at a sheep conference two years a go where teagsc was telling us about a survey on ram taint in lambs, and how there was no difference in the taste of older ram lams and ewe lambs.
Bertie Mannion (kepak) said he was out in the real world, and he had to sell those lambs and if the customer doesn't want entire rams.....the customer is always right

just do it

The key to its success would be getting a visionary leader with ability to crack into established competitive markets. Easier said than done.

Nettleman

just do it wrote: »

The key to its success would be getting a visionary leader with ability to crack into established competitive markets. Easier said than done.

Everything is possible, if farmers are determined, just because we are farmers doesn't mean we cant hire a sales director. Will the thoughts of competing with LG scare them off, probably, but we wont want a sales director who afraid of a challenge, hire them on a delivery contract, they make the sale and are responsible for ensuring the cash is collected. No sales, no cash, no job. Dont forget, Bord Boa will be duty bound to help market the coops produce. Irish Farmers have built some of the best companies in the world, Glanbia, Dairygold, IBD, IAWS, Kerry....

ganmo

What would happen if one of the current companies let the market? Someone told me when I was younger that it would solve some of the problem?

Nettleman

ganmo wrote: »

What would happen if one of the current companies let the market? Someone told me when I was younger that it would solve some of the problem?

I think one was up for sale last year or year before, but the others are too rich to leave now. the beef farmer coop is about farmers taking some control over their own destiny If we take 10% of our cattle away from existing players, we are taking away their sales channels and their margin on 160k cattle. They will be out to crush this idea before it gets momentum, I guarantee it. there will be opposition at every turn, but we as beef farmers, should ask why are they resisting, and why are their books never opened up to scrutiny. They don't want a revolution in irish beef, theres too much money at stake, and the shoe has been kept on the farmers head for far too long

greysides

AS per request:

Nettleman wrote: »

Does anyone remember the revolving penny scheme.....well that was a huge success where farmer dug into their pockets to support their local coop. I actually think the real problem will be trying to ignite the fight in 100,000 dis-interested/ hacked off/ fedup beef farmers, who wont even protest anymore, and have had their spirits and fight broken over the years. Younger farmers are also hungry for something new, different.
If a coop (their coop) can convince them there is another way to explore, another way to atleast try, without IFA, or EIF, they might give it a shot, and get their neighbour to do the same. I haven't even registered a coop yet, but the response from the thread, i might need to soon.
It may not be a success, and it may hit many problems, problems will be compounded by the existing Establishment who like the way things are, but that life, employ an executive team, Pick a Board of non-executives to hold them to account. Board and Executives must do an interview in front of farmers to demonstrate their capabilities, after or during a selection process, Publish annual accounts (unlike IFA) renumeration committee, external auditors, etc etc, these things cost money, but the confidence & support of the Irish beef farmer has to be maintained. [mod-pls copy to beef coop thread-tks]

freedominacup

There's a lot of enthusiasm here lads and that's to be commended but even if you corner the entire irish market you will still need to find a home for 90% of the cattle produced here. If you could wave a magic wand and achieve this tomorrow morning and could get it to return a farm gate price of 5 euro per kg for R's pro rata on other grades it would have the effect of moving the price from 3.60 to 3.75 on average over all carcasses. The factories still would have no imperative to move, 90% of our cattle would still need an oversea home.

Forget anything to do with a owning processing facilities put your money into developing a brand and a market. Bulmers did it around 10 years ago but they had their thunder stolen because they didn't have a usp. The pint bottle of cider over ice had never been a thing in the UK. They got one massive year out of it but to much of the UK market Somerset is as different as Clonmel. The UK producers had the clout to undercut Bulmers and supply a product essentially the same. There's lessons there both in what they did right and in how they left themselves exposed. Point is they created a market where there wasn't one.

We need to create a market for a product that we only can supply. You then get the factories to kill and process your own stock or install them as a middleman between the farmers and their own marketing co-op. It shouldn't matter to shareholders whether they get the price at the lairage or in dividends. The factories are already involved in deals like this of various hues. Many of the supermarkets have tame processors that the factories sell to at a price dictated by the supermarkets. These processors then pack whatever in whichever own brand pack size the supermarkets want.

This is where the professionals come in, people who are at the top of their game in marketing and branding. Any form of collective bargaining will draw the ire (unfairly) of the ca with the factories egging them on and as others have stated they'll move heaven and earth to ensure any farmer controlled processor is drowned at birth. But marketers, the factories can do nothing to stop them without undermining themselves and the ca don't come into it. This got disjointed as I'm posting on the phone but I hope I made some sense.

johal

my 2 cents,
A co-op or producer group producing top quality suckler weanlings or yearlings supplying there own co-op or producer group owned feedlot in italy. I am sure that irish breeders could breed any type or breed including the local italian breeds ie piedmontese,or any of the others that the market wants and will pay very well for . There is a huge premium in price paid for these as they can be labeled and sold as a local breed. i got some of this in a resteraunt in venice a while back. i think it was a chiana breed, the steak was huge and sold as a meal for 2 and cooked at your table.

i have nothing to do with, and am not involved with any italian beef breed .

i think that you must start at the sale price, ie on the shelf in the top paying market and work back from there.

i am behind any co-op or producer group for beef but i see 2 problems
1, irish market is based on price
2. i fear the irish farmer will sell out to the factory agent when the time to sell comes

TUBBY

Damo810 wrote: »

Will read this topic later, but who would buy meat online, especially if they don't know the owner(s)? We'd be far better off trying to develop and brand and get it in the supermarkets or butchers, no? A bit like Truly Irish in pork.

truly beef might be a good name considering the last few years shenanigans.

fatoftheland

It's already underway business plan for beef co op has been drafted and Icos have backed the idea. Hoping to gauge the level of interest fo it at the ploughing. Most of the issues that have been discussed have solutions put in place. 5000 farmers nationally is what's needed or 14% of farmers within a 50 mile radius

Farrell

Nettleman wrote: »

Not fixed on any one idea, we are discussing it here, thinking re online as a way to connect with the end consumer, if they pay transport you are going from start of calf birth to final consumer, and farmer is there all the way, do we operate in 3rd party transport for trade and retail customers, and drive our bone-in or deboned meat to all butchers and retailers in Ireland-maybe. If margin from boned out is not worth it, well then don't employ butchers in the factory and forget about a boning hall, and just sell your "big bits" to the trade. 5th quarter is another area which is a total secret, and farmer gets paid zero for it. There are irish customer here for that, and they are importing lungs, hearts etc from abroad.

Agree with this.
Would everyone involved have to be BA? (Help the marketing image)
To reduce transport of final product, there could be small stores in different zones of the country where the Customer could type in their address, place an order & delivered within a time-frame.
If the local store does not have it, then transported from next nearest store etc