Chile could reverse beef trade trend

When beef and south American countries are mentioned, Irish farmers fear an influx of cheap imports.

However, there is an exception among South American countries that could create an opportunity for EU beef exports. That is Chile.

Chile is outside the main Mercosur group of South American countries, being an associate member, with a population of almost 18m and a growing economy based on its mining industry. Its agricultural output is relatively small. Its beef exports were 20,000t in total in 2016, while it imported 240,000t, almost as much as the UK imports from Ireland.

Open for business

It has now agreed to accept beef from the EU after agreeing definitions of meat cuts and classification or grading of cattle. Agreement has now been reached between both parties on a correlation between EU and Chilean definitions that will enable trade commence.

Cattle prices are usually much stronger in Chile, being a net importer of beef in a region where most countries are huge beef exporters.

Currently farmers are receiving on average the equivalent of €3.70/kg, which is on par with Irish farmgate prices.

While Chile is now open for trade and is a significant importer of beef, it will be of limited opportunity for Irish and EU exporters. Its geographic location on the pacific side of South America makes it inaccessible, while it is surrounded by some of the world's biggest beef exporters in Brazil, Paraguay, Uruguay and increasingly Argentina again.

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