FDBusiness.com

Glanbia Ireland (GI) and Kepak Group have announced an ambitious and innovative new calf-to-beef programme in Ireland. The “Twenty20 Beef Club” affords Members a guaranteed market for their heifers and steers with a predictable and transparent pricing formula at time of slaughter; a production blueprint supported by safe and secure high-quality farm inputs and leading-edge technical advice.

For Kepak customers and consumers, the Twenty20 Beef Club will provide a secure and predictable supply of high-quality beef with unrivalled traceability and with the attributes of a “closed loop” supply chain.

This year will be a pilot year for the programme, with a target of 6,000 calves from Glanbia Ireland supplier dairy farms in the Republic of Ireland. Over the coming years Glanbia Ireland and Kepak have ambitious plans to rapidly expand numbers in the programme to 50,000 per annum.

In a world-first in the beef sector, Glanbia Co-op has provided funding for the pilot phase to allow its Members of the Twenty20 Beef Club to benefit from an advanced payment of up to €770 per animal to provide cashflow during the animal’s lifetime. This optional programme component, administered by Finance Ireland, will pay a Twenty20 Beef Club Member €35 per animal per month from months 3 to 24. Glanbia Ireland and Kepak Group are in discussions with Finance Ireland whereby this advance payment option would be offered to all qualifying Club Members after the pilot phase.

The Twenty20 Beef Club is open to Glanbia Co-op Members and current Kepak suppliers. Members can be either dairy farmers or beef finishers, with a minimum of 25 calves required per farm. Suckler farmers that purchase dairy beef calves can also enroll qualifying animals bred and produced on their own farm that meet the Club criteria in the programme.

Animals enrolled in the first two years (2019 and 2020) of the Club will be paid the average market price, plus a Club Premium of 15 to 25 cent per kg, as well as a Club Protocol Bonus of 12 c/kg. Club Members will also benefit from additional price support in the event of a weak market price (see examples in Appendix).

There will also be a “seasonality” bonus to promote the 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 at the point of entry for the pilot phase.

At an average market base price of €4.00/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 would earn €4.28/kg.

To assure the feed and food safety credentials of beef from the Twenty20 Beef Club and to deliver the optimum animal performance, all relevant farm inputs consumed by Club herd will be sourced and supplied by Glanbia Ireland. 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 to Club Members by Kepak’s agriculture team. For the beef customer, this will create a high quality “closed loop” supply chain from animal genetics through to the market place.

Members of the Club will be required to strictly adhere to a defined rearing programme – jointly developed by Glanbia Ireland and Kepak.

Glanbia Ireland and Kepak have designed the initial five-year Programme to meet ambitious economic and environmental performance targets. These include:

• 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 the use of methane reducing feed additives, reduction in the 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 through a combination of 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 enhanced on farm efficiencies, breeding, feeding, grassland management, animal health/welfare and slaughter preparation and selection.

John Horgan, Chief Executive of Kepak Group, says: “This innovative Twenty20 Beef Club will provide leadership in establishing a truly integrated supply chain with unrivalled traceability and associated ‘closed loop’ beef attributes. Through our collaboration we have developed a unique, if not revolutionary, solution to a longstanding quest of beef farmers for more predictability in future beef pricing and an animal-lifetime cashflow option. We have developed an end-to-end science-based blueprint for a sustainable beef product to meet evolving customer and consumer meat eating trends.”

Jim Bergin, Chief Executive of Glanbia Ireland, comments: “This initiative is about two of the leading players in farm inputs and beef production being proactive in combining their skills to produce a more sustainable beef production model. This programme provides our combined Club of farmer suppliers the opportunity to collectively produce beef in a model focused on ensuring both economic and environmental sustainability.”

Martin Keane, Chairman of Glanbia Co-operative Society, says: “Uncertainty around pricing and cash flow have always been challenging for calf-to-beef producers. I am pleased that Glanbia Co-op, Glanbia Ireland and Kepak have combined their expertise and resources to address these challenges in this innovative and exciting programme. It is a welcome confidence boost for producers of quality Irish beef. 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.”

Glanbia Ireland processes a 2.7 billion litre milk pool from 21 counties and exports high quality dairy and agri ingredients as well as branded products to over 70 countries. Glanbia Ireland is a joint venture 60% owned by Glanbia Co-op and 40% owned by Glanbia plc. With annual revenue of €1.8 billion, Glanbia Ireland has 11 processing plants, 53 agri branches and over 1,800 employees.

Kepak Group operates 15 manufacturing facilities throughout Ireland and the UK with sales offices in Europe, the US, Asia and Africa. The group processes 500,000 cattle, 1,700,000 lambs and 450,000 pigs per year and markets a broad range of fresh and value-added meat products serving many leading foodservice and retail customers. Kepak Group has a turnover of €1.5 billion and employs over 5,000 people. Its portfolio of market leading brands includes Rustlers, Big Al’s, John Stone, Stript Snacks and Celtic Beef.