Why Australia and New Zealand have replaced Brazil as the bogeyman for Irish cattle farmers

The Bord Bia advice is that Irish beef must play to its key strengths to hold its strong market position in the UK

The UK imports about 300,000 tonnes of beef per year. With about 75% of these imports coming from Ireland.

Traditionally worried about beef from Brazil flooding into the EU and UK, Irish cattle farmers now have to look further afield for competition.

Within 10 years, beef (and lamb) can come duty-free all the way from Australia and New Zealand, into the UK, which is the sixth biggest importer of beef products in the world. That's why Australia and New Zealand have replaced Brazil as the bogeyman for the Irish beef industry. 

These two countries on the other side of the world are the world's third and ninth biggest beef exporters (Brazil is the biggest, the USA is the second biggest).

A year ago, British farmers reacted furiously when Prime Minister Boris Johnson signed a giveaway free-trade agreement with Australia, followed a few months later by a similar deal with New Zealand.

Now, farmers have told political parties looking for their vote in the UK's general election on July 4 to restate government commitments to full sovereignty over food and farming standards in future free trade deals. However, Irish farmers have just as much to lose as their British counterparts.

The UK imports about 300,000 tonnes per year. With about 75% of these imports coming from Ireland, the UK takes nearly 50% of the beef produced in Ireland, and about 23% of the beef consumed in the UK comes from Ireland.

However, Irish fears were eased earlier this year by Bord Bia beef trade experts, who said it will take time for Australian beef to build out a robust supply chain, and they will still be limited by tariff quotas for many years.

So far, they have been right. One year after the UK's trade deals with Australia and New Zealand came into force, New Zealand is using just 20% of its still small duty-free quota, with Australia using just 8%.

New Zealand did not use any of its extra lamb allowance in the first seven months of the deal, Australia used only 20% of its allowance. These quotas will gradually allow the quantities of Australia and New Zealand's beef and lamb exported duty-free to the UK to increase to 100%.

The only protection for the UK's livestock industry (and Irish beef exporters) is a safeguard clause in the free trade deals that tariffs can be re-introduced if there’s a surge in exports.

From year one to year 10 (2023 to 2033), the quota for beef will rise from 35,000 tonnes to 110,000 tonnes. From 2033, imports of beef from Australia and New Zealand will no longer be subject to tariffs.

A dramatic 2023 cattle price crash in Australia, with live prices averaging 41% below 2022 levels, helped to boost the country's beef exports. They increased strongly throughout 2023, by 48% to the USA, by 37% to China, by 16% to South Korea, by 50% to Indonesia, and by 6% to Japan. 

But the UK is a more demanding destination. Australia's grain-fed beef has historically worked well in the UK's foodservice sector, but the UK standard means it must be hormone-free. So, a long lead time is needed to scale up this supply chain.

A much more attractive market at the moment is the USA, with 375,000 tonnes of lower-duty access still available.

Australia and New Zealand can also find easier markets in the Gulf states. That could all change if, for example, Australia falls out with China, and loses that beef market.

New Zealand lamb already sells in UK supermarkets for £6.49 per kg; British farmers say there is absolutely no way they can sell lamb at that price. It illustrates how meat from the other side of the world could undermine British farmers, or Irish exporters into the UK market.

However, market specialists in Bord Bia have pointed out that Irish beef has a major presence in UK shops, where it is viewed by retailers and consumers as interchangeable with British beef. 

The Bord Bia advice is that Irish beef must play to its key strengths to hold its strong market position, aided by proximity to the UK market, interconnected supply chains, consumer acceptance, sustainability credentials, and trusted relationships with key partners.

They warn that UK importers may use the lower Australian prices as a negotiating tool, but predict no major changes in the short term in the UK import market.