Meat Industry Ireland says future increases of cattle output volumes can be successfully marketed particularly in the light of the recently announced openings of international markets for Irish beef.
While not quite as dramatic as the abolition of milk quotas, access for Irish beef to the US and China is akin to lifting the ‘quota’ on beef export markets that has stifled the opportunity for our beef sector to compete internationally.
The 2014 €2.1bn export comprised a 14 % increase in beef volume output and an 11% price reduction on 2013-only the first year since 2009 that beef prices failed to increase year on year.
Both markets are among the largest beef consuming markets in the world; both have medium-term structural deficits of beef supplies; both have higher market prices than current EU prices.
Furthermore, in May this year, Ireland will transition to what is termed ‘negligible risk’ status for BSE as per the International Veterinary Authority, the OIE.
This improvement in the range of market options available for Irish beef is a major game changer in terms of the ability of the beef processing sector to handle increased output.
In contrast to 2014, for example, and for the first time in nearly two decades, the sector will not be solely reliant on the EU market for sales. EU beef consumption has fallen during the recession by over 700,000t and is still weak.
This significant improvement in market access coincides with the expected paradigm increase in beef supplies.
If Ireland is to meet its Dairy 2020 growth target of a 50% increase in milk supply, this will result in an increase in the dairy herd to 1.4m cows which, along with a stabilised suckler herd, represents a potential annualised increase in cattle production of 250,000 head plus.
Bovine genomics/breeding indices/sexed semen all have the potential of increasing the beef characteristics of this increased output from dairy cattle in a manner compatible with good dairy husbandry.
A meat plant with an average annual throughput of 60,000 head contributes around €80m to the local rural economy though cattle purchases wages and service payments, in regions, for the most part, with little or no foreign direct investment.
The one essential element in ensuring there is a profitable return for producers for keeping and finishing such cattle will be the availability of a range of buoyant market outlets, particularly if austerity continues to bedevil the European economy and if EU beef consumption remains in decline.
Moreover, the analysis of weekly cattle slaughterings at Irish meat plants over the last five years shows that weekly beef throughput exceeded 30,000 head for more than half of the weeks annually. Furthermore, for more than half of those weeks when throughput exceeded 30,000 head, cattle prices went up.
An increased supply of beef animals is eminently sustainable if there are markets available. The EU market for beef has been in decline throughout the recession and shows no immediate sign of recovery.
In contrast, beef demand across a range of markets from the US to emerging economies in Asia has been increasing and their market prices have been buoyant. But Ireland has been locked out of supplying these markets because of BSE legacy issues in the main.
Nevertheless, in overall volume terms, the EU and our near neighbours the UK, in particular, will remain the bedrock of our beef export industry but increasing access to a range of international markets is vital in terms of underpinning export growth and for leveraging the maximum return from our existing EU markets.
Ciaran Fitzgerald, Chairman of Meat Industry Ireland (MII). MII is the sector association responsible for representation of the business interests of the beef and lamb processing sector in Ireland.