It’s now or never, if the Irish beef industry is to break into new markets.
Sales to Russia are banned until next August, at the earliest; however, Ireland becoming the first European country to sell beef into the US in 15 years is one of the few bits of good news Agriculture Minister Simon Coveney has been able to give our cattle farmers all year.
The US has recently lifted BSE restrictions on Irish and European beef, which had been in place since 1999. Grass-fed, and from Irish farms that cannot use the growth hormones administered to most North American cattle, the beef is destined for a €700m per year ‘green beef’ market in America, which accounts for 8% of the US beef market.
Mr Coveney says it’s a great time to be getting into the US market, because the price of beef there is as high as the price of beef in Europe, for the first time ever.
The expected breakthrough will come after two years of diplomatic efforts — which indicates how hard it is to find new markets.
The US has had to turn to beef imports, expected to reach 1.225m tonnes in 2015, a significant amount compared to forecasted US beef production of 10.755m tonnes.
Australia and New Zealand are their principal import sources.
US demand is helping to support cattle prices in Australia, despite their current, record-high beef output.
Similarly, demand from the US and China is keeping New Zealand beef returns at record levels. Ireland enters the market with an advantageous euro exchange rate, and a reasonable beef price, due to fairly strong EU production and increasing competition from cheap pork and poultry meats keeping a ceiling on the EU beef price.
On the demand side, the US consumer’s appetite for beef remains firm, despite their record cattle prices.
With record cattle prices also in Brazil and Canada, and Argentina’s beef exports at historically low levels, Irish beef exports can be competitive. Irish beef processors expect that the US will be a low-volume, high-value niche market for Irish beef, particularly for steak cuts, but will be important from a reputational perspective, and would, hopefully, trigger access to the US lamb market also.
Processors see maximum access for Irish meat to international markets as key to the development of the sector.
Farmers will hope that success in the US will help processors export beef to Iran, a big beef importer that recently finalised veterinary certification for Irish beef.
If all goes well, the next target market will be China, where our big beef companies will accompany Minister Coveney on an upcoming trade mission.
Ireland has also opened access to beef markets in Japan, Qatar, Saudi Arabia, and the United Arab Emirates.
Cattle farmers haven’t much to celebrate this year, but they can, at least, dream of a return to previous times, when 40% of the beef in Saudi Arabia was Irish.
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