In the event of a no-deal Brexit, Irish beef would still have a good degree of access to the UK, says the Agriculture and Horticulture Development Board (AHDB) in the UK.
AHDB market analysts say the proposed tariff-free quota, although available to all, would allow Irish processors some ability to continue to operate.
“If the proposed no-deal tariff schedule continued beyond the first year, any incumbent advantage to Irish companies might erode over time. Lower cost suppliers from elsewhere could compete for UK market share.”
The AHDB market analysis says export prices for Irish beef have been 11% lower in the first half of 2019, which goes some way to confirm the recent Meat Industry Ireland (MII) market report of “extremely challenging market conditions” and “ongoing uncertainty generated by Brexit, with the real prospect of a no-deal outcome” being the root cause of current weak beef and cattle prices.
AHDB said Ireland’s beef export performance has been strong, with total six-month volumes increasing by 14%, to 205,000 tonnes year-on-year. But beef exports to the UK were 4% lower, at 84,000 tonnes, and export prices fell by 6% to the UK, which takes about half of the beef produced in Ireland.
MII referred to extremely poor sales demand in export markets in the UK and across Continental Europe.
However, AHDB said Irish exporters have (instead of the UK) been sending more beef to the Netherlands, France and Italy, as well as markets further afield.
AHDB said there has been impressive growth in volumes to the Philippines, which have tripled since last year, to 7,300 tonnes, and importantly, over 3,000 tonnes has gone to the newly opened Chinese market.
The AHDB says the Chinese market (open to Irish beef since mid-2018) could prove to be a real boost to the Irish market, and by association the UK market, in the coming months.
AHDB market analysts say there may now be a backlog of Irish beef cattle to work through, after farmer protests disrupted the industry.
Beef production has been high in Ireland during the first six months, reaching 315,000 tonnes. Average weights have been marginally higher, but it was numbers (up 5%) that drove the 6% rise in production, compared with 2018.
Numbers fell in June, although increases in carcase weights went some way to offset this.
Irish throughputs are expected by AHDB market analysts to fall back in the second half of 2019. This is due to increased calf exports two years ago.
Longer-term reduced Irish production is also envisaged, with the increased current heifer and cow kill suggesting the suckler herd is unlikely to be growing, and calf exports elevated this year too, by 11% in the year to June.