Thursday’s news that the Chinese market has reopened is very positive news for Irish beef farmers.
It’s taken two and a half years to regain access to the lucrative market for Irish beef, having been locked out of it in May 2020 following an atypical BSE case identified in a cow on a Tipperary farm.
It was hoped that the ban was short term, but this wasn’t the case.
Over the last two and a half years, there have been several visits by Chinese authorities to inspect slaughter plants and controls in place in Ireland and after protracted negotiations, access was finally granted this week.
It’s a massive market, with 1.4 billion consumers. It’s as yet unclear as to what switch was flicked to regain access, but more than likely the Chinese demand for beef is set to grow further and that means the Chinese authorities had to look at extra countries to import beef from.
The market was worth almost €100m in 2019 and it has the potential to be right up there in the top five markets to which we export beef to.
Much of the market will be for lower-value cuts, but the sheer size of the market offers huge potential for Irish beef exports.
Processor approvals
In 2020, a large proportion of Irish beef processors were approved to export Irish beef to China.
The big three of Dawn, Kepak and ABP were all approved, including Foyle Meats in Donegal, which was one of the first to offer bonuses on Chinese-eligible cattle. All are expected to enter the market again quite quickly.
There are a few specific requirements that Irish processors have to adhere to, none of which are seen as being overly restrictive on day to day operations.
Cattle must be under 30 months to be eligible for the Chinese market. All cattle must also originate from a herd that has been clear from TB in the last 12 months. The herd must have also have never had a confirmed case of BSE.
There are other segregation protocols, which must be adhered to, such as keeping animals destined for the Chinese market separate to other animals in factory lairages and also on slaughter lines. Cattle must also come from a Bord Bia quality assured herd.
All eyes will now be on Irish processors to see what bonus payments will be applied to cattle eligible for the Chinese market.
Before the ban, processors were paying out a 10c/kg bonus on Chinese-eligible animals. That was when beef base prices was at €3.60/kg.
Beef base quotes are currently trading €1.50/kg above this or 40% higher, so it’s expected that the Chinese bonus will be higher in 2023, possibly in the region of 15c to 20c/kg.
Current indications are that there is big demand from China for beef, so it’s expected that some factories will begin slaughtering cattle for the Chinese market as early as next week.
This will add further pressure to prime cattle supplies, which are already very tight, and will likely drive up base quotes for all cattle in the coming weeks.