Beef plants ‘chomping at bit’ to get bulls into China shops

Minister for Agriculture, Food and the Marine Michael Creed says Irish beef processors are “chomping at the bit” to start selling into the Chinese market.

Speaking ahead of next week’s trade mission to China – where Irish beef is expected to hit supermarket shelves this summer – Creed says the potential for grass-based beef is “huge”.

Representatives from a number of the country’s beef and dairy processors will accompany the minister – along with a delegation from Bord Bia and embassy officials – on the week-long mission to build market contacts, share the country’s sustainability story and expand political relations.

The three processing plants that have already received approval for access to the Chinese market are: ABP Clones, Co. Monaghan; Slaney Meats, Co. Wexford; and Donegal Meat processors.

A second tranche of processors including: ABP Nenagh; Kepak Clonee; Kildare Chilling; Liffey Meats; and Dawn Meats, Charleville, Co. Cork are awaiting approval.

According to Bord Bia, China officially imported more than 700,000t of beef in 2017 – a figure expected to double by 2020.

The drive for market access to China – officially announced last month – is also part of the Government’s Brexit strategy, given that over 50% – or in excess of 250,000t – of Irish beef exports currently go to the UK market.

China is already positioned as Ireland’s second biggest market for both dairy and pork.

“Our exports have grown in China in under 10 years from about €200 million to nearly €1 billion. Beef is obviously a new product on the shelf; but, bearing in mind how quickly the dairy side has moved, the potential for beef is very significant,” Minister Creed said.

Although average consumption of beef in China is low – an estimated 4kg per consumer per year, compared to 19kg per consumer per year in Ireland – middle class populations are on the rise, alongside growing trends towards western dietary habits.

Beef could take off there, yes. A small increase in consumption patterns would be a very significant increase.

“If it was to go up by 1kg per person in China, they would need to import 1.4 million tonnes extra of beef alone,” said the minister.

Industry-wise, Minister Creed said there is “a lot of excitement” –  particularly in terms of potential for the so-called “fifth quarter”.

“It is my responsibility politically to maximise the effort that goes into opening markets and then the industry maximises the commercial return.

“They’ve expressed an appreciation of what the market can do for them in the context of the fifth quarter; but obviously prime cuts is where you get the biggest return, if you have the market for it .

But whether it’s prime cuts or the fifth quarter, it’s open. My message for industry would be that, within the confines of the approval, go and sell as much as you can. That is important.

“I know some of the companies are chomping at the bit to get there,” he said.

‘Grey market’

When asked if Irish beef is already available in China through so-called ‘grey market’ access, the minster said:

I don’t know. From our point of view we want to go through the proper and official channels.

“We have proper and official access now and the industry has no reason to use any other channel,” he said.

With a series of political and commercial meetings on the agenda during the trade mission – covering Beijing, Shanghai and Hong Kong – Creed is eager to promote Irish beef as “the new kid on the block”.

But he’s under no illusion that China’s awareness of Ireland’s agri-food story may be quite limited.

‘The food island’

“I’m pretty sure you could walk down main street China, ask people about Ireland, and they would probably look at you like you had two heads.

“I suspect really what we need to do is forge business-to-business alliance arrangements. Rather than trying to conquer all of China; we need to focus in on Beijing or Shanghai or Hong Kong.

These cities are bigger than a lot of our other markets combined. The opportunities are really exciting; we’re the first country in there.

“Grass-based is our pitch; it’s what we sell and we’ve succeeded in capturing the imagination of business over there.

“But the most important thing is that we don’t dilute the message. We are the ‘food island’, we have sustainability credentials and we have the tag-line of Origin Green. We need to keep it simple and keep repeating it,” he said.

Following the success of Irish dairy and pork exports in China; the minister also highlighted that sheepmeat access is on the horizon too.

“We’re at the very, very early stages on sheepmeat,” he said.

The Chinese made it very clear. I think there is potential down the line; I don’t want to quantify it now but we are beginning the process of sheepmeat access to China.

Competition

But what about the practicalities at farm level. When and how will farmers start to reap the rewards of beef access to China?

“Competition is really important for farmers. We have over 60 countries buying our beef exports.

The more competition you have, the better chance there is of delivering a price to the primary producer.

“I recognise the value of China in terms of the scale of the market and what it adds to competition – live exports are going to play a really important part,” he concluded.