Irish left out of global surge

Our island location has saved our livestock farmers from various disease threats to their herds — but it also seems to have insulated us from global markets.

Cattle farmers here may wonder if they are on the same planet as the one where beef cattle prices in most countries increased slightly in August, and the main question in many regions is likely to be where to source sufficient beef supplies, given tight availability and increasing global demand.

That’s the main message in the beef quarterly report from Rabobank, the leading global agri-bank.

Unfortunately, their findings do not apply in Ireland. Here, farmers were inflicted in August with what IFA called “unprecedented” cattle price cuts by our beef processors, “inflicting severe financial and income damage on livestock farmers and acutely eroding confidence across the livestock sector”.

IFA said this was seriously damaging confidence in the beef sector and particularly the suckler cow herd. And now, Agriculture Minister Simon Coveney has hinted he may have to find money in next week’s Budget to help suckler farmers — citing anecdotal evidence to suggest that a large number of suckler cows are not being put into calf and a large number are being slaughtered.

It seems that scarce taxpayer money will be used next week to “give some signals to the suckler sector in this budget”.

Surely this money would be better spent on investigating why cattle prices fall in Ireland (which exports about 85% of its beef) while demand outstrips supply on global beef markets.

Or it could be used to make it easier to export cattle to Northern Ireland. Market forces seem to work more efficiently along the Republic to Northern Ireland to Scotland route.

ICMSA says Irish beef cattle prices have trailed 50 cent per kilo behind the UK average this year. This also drags down cattle prices in Northern Ireland. Scottish cattle dealers have taken advantage of this, shopping for cattle in the North to take home on the ferry. Price, which of course depends on demand and supply, has risen in northern marts due to Scottish demand, so Northern buyers come south of the border for cheaper cattle here.

They have to re-test the cattle at the Border — but perhaps our taxpayers’ money would be better spent encouraging and freeing up that cross-Border trade, than on subsidising suckler herds.

Then, a steady northern trade could be built up, due to demand generated by buyers in Scotland.

Scotland seems to be better connected to the global beef market in which Rabobank expects further “upside” for the remainder of the year, and into 2014. Demand is expected to remain strong due to the global economy’s slow recovery, and buoyant markets in Asia, especially China (to which, unfortunately, Irish beef does not have access).

Rabobank says Chinese beef imports may surge due to the Chinese New Year in February, drawing Australian supplies away from the US.

Farmers here will hope Brazilian supplies are diverted in turn to the US, which might restrict the 8.3% jump in EU beef imports from Brazil for the first half of this year.

But if that happens, we may need the Scottish route to play our part in the market.