The annual Bord Bia meat seminar this week reflected on an overall positive year for all Irish meat species and was broadly positive about the year ahead. The big concern this time last year was what would happen to the extra 100,000 cattle forecast to come into the system. As it turned out a combination of strong markets and reduced carcase sizes meaning less beef per animal processed, meant that the increased kill was handled with prices noticeably higher than a year earlier.

It was also a 10-year high for the sheep kill at 2.9m including the 408,000 that came from the north. While prices started the year sluggish, the main season crop of lambs were selling ahead of last year’s values. On pig meat, a mid year cull in China meant that they weren’t as hungry for imports as before though this is seen as a correction more than a weakening of the market.

China

Despite the expectations that were raised almost three years ago with the announcement that they were lifting the BSE ban on Ireland, not a kilo of Irish beef has been directly exported to China. Market access is a torturous process with several exchanges over the past three years.

The final phase is underway with the inspection visit to several Irish factories last August and September, the report of which has just been received by DAFM in the past week. Assuming there are no major issues in that, we can hope for business in the first half of 2018 in beef to accompany the rapidly growing dairy and pig meat exports.

Importance for Irish farmers

The success of the Irish meat export industry depends on Irish farmers for the supply of the raw material. A few hundred pig farmers support thousands of jobs in processing and distribution whereas tens of thousands of farmers with often small parcels of land are required to supply the raw material for the beef and sheep meat processing industry. Given the challenge of producing meat from the land, it is imperative that it is sold in the best and highest value markets to maximise the return for farmers in this marginal sector of agriculture.

Given that Ireland is the fifth largest net exporter of beef in the world and the threat of Brexit that looms over the sector, the Chinese market offers exciting potential unlike the USA which opened three years ago but has only taken a couple of thousand tonnes over the past two years.

Already, Irish exports of pig meat and dairy have reached over €650m in 2016 from less than €100m in 2010.

On beef, Chinese import demand was estimated by Bord Bia to be 1.2m tonnes as beef production isn’t a priority for China. Only 9% of the country is arable land and rice production is the staple food with pork the main meat. Demand for beef is driven by the growing middle class and the government are quite content that it is imported.

Competition

China remains a relative closed market for imports. Seventy per cent of Chinese beef imports are supplied by the large South American exporters of beef while Australia and New Zealand account for 29% between them. Ireland is the most advanced EU country in securing approval so there will be an immediate opportunity to do substantial business.

Logistics

The Irish meat industry has become accustomed to a slick supply chain, serving the UK retail and burger chains through computerised ordering and a just in time delivery system of retail packs straight to the shelves. However as Bord Bia pointed out the distribution chain in China is much more complex. Much business stops when supplying an importer from where product is fed into a local processing system and distribution by a wholesaler network to the retail or food service outlet. However this is the same system that all current suppliers to China have to work with so Ireland should be at no relative disadvantage.

Other Asian markets

Looking at future potential markets is an exercise also underway in Bord Bia in which 15 mainly Asian and Middle East North African countries have been selected to investigate further. The Philippines which has been a major export market for Ireland in recent years didn’t make this list.

It is clear 2017 was a successful year for the Irish meat industry and its importance to the Irish economy outside the major urban centres is clear. Dairy, tillage and horticulture are also important contributors and combined with the agri-food industry is an absolutely essential element of the rural economy. Without it, a rural economy simply wouldn’t exist.

The success of the processing industries is welcome but doesn’t necessarily reflect the success or otherwise of the foundation of this success – the farmers who milk the cow, fatten the calves and look after the lambs.

The reality is that many sectors of Irish farming who provide the raw material for our processing industry and benefit the overall economy, are at best marginal businesses. Last week’s seminar demonstrated the value of the sector to the wider economy, the challenge now is to find a way that rewards the providers of the raw material that make it all possible.

Watch more videos from Bord Bia's meat marketing seminar including interviews with processors and sheep, pigmeat and poultry outlooks below:

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