Mr. Pearse Kelly:

One just needs to be careful whether one is referring to under 16-month dairy beef or under 16-month suckler beef. For the past 12 months, under 16-month suckler beef would have been allowed onto the grid by many of the meat processors. The advantage of this is that, as Professor Boyle pointed out, they attract a higher confirmation. This means that if one is on a base price, one will be getting the quality assurance of 12 cent per kilo and attracting bonuses as a result of the fact that one is killing U-, U=, U+ or E- grade cattle. Those bonuses are quite significant and they are all added to the base price. The other point in respect of suckler beef under 16 months old is that one will be killing spring-born bulls under 16 months old in or around May or June. Traditionally, the highest price has been obtained during those months. Professor Boyle is correct in stating that if one considers today's prices for bulls under 16 months old, one will discover that they are unprofitable. This is no different from the position with regard to much beef production, based on the price available on the market.

The difference with dairy bull beef is that the relevant animals are not on the grid. If they were, in all likelihood - and as a result of their confirmation - many of them would be discounted rather than attracting bonuses. These animals are significantly less profitable to the point where they are unprofitable. The only way a dairy bull under 16 months old could become profitable would be if there was a significant reduction in the price paid for dairy bull calves from day one. This would mean that other farmers would suffer in the same way dairy farmers are currently suffering. It is a small cake. They would also become profitable if meal prices - which are related to cereal prices - dropped significantly. In its projections for the next ten years, the OECD is not predicting a drop in cereal prices. If anything, it is predicting an increase.