The police investigation Operation Weak Flesh has not yet caused a surge in prices in other major exporting countries beyond increases that were already under way. For example, the US futures in beef on the Chicago Mercantile Exchange (CME) was reporting a forward price of $1.22/cwt, the equivalent of €2.50/kg liveweight, which leaves the market 10% higher than it was six weeks ago. However, this is driven more by a scarcity of Australian imports than anything that happened in Brazil.

Prices in Ireland

Prices in Ireland have crept up over the past week, though they have been slipping in Britain, back the equivalent of 10c/kg since the start of the year. Meat and Livestock Australia reported its most recent Eastern Young Cattle Indicator (EYCI) price on 22 March at Aus$6.18/kg (€4.38/kg), down 30 Australian cents since the start of the year. This average is calculated from data collected at sale yards (marts), is based on cattle over 200kg liveweight and is converted to carcase weight equivalent.

Pigmeat

Irish and EU pigmeat prices continue on a steady upward curve, with the Irish price reported to the EU at €1.66/kg for the week ended 18 March. Bord Bia reports EU prices up 3% since the start of the year, with China continuing to be a very strong market for Irish and EU pigmeat.

South Korea has reversed its decision to ban Brazil

It is clear markets in major exporting countries have been marking time over the past week. While Reuters reports Brazilian exporters are saying demand is down, this is partly driven by a fear of shipping product in a time of relative uncertainty. Intensive checking and monitoring is more the order in their main export markets, with outright bans confined to the companies involved in the investigation. South Korea has reversed its decision to ban Brazil. However, if the now-detailed inspections of imports reveal problems with quality, formal bans will follow.

EU position

While leaders are gathered in Rome this weekend for the EU’s 60th birthday celebrations, chief veterinary officers from member states met in Brussels yesterday. Commissioner Andriukaitis, who is responsible for health and food safety, will be in Brazil on Monday and will raise the issue. In a statement on Friday evening, the European Commission said “the Commission will meet with the member states on the 29 March to ensure that there is a harmonised approach in relation to the details of these reinforced checks. This will include the states, regions and/or products, microbiological criteria and other relevant parameters to be targeted.”

What is found in these checks, along with steps and assurances received from Brazil, will shape the next move by Brussels. The Commission also said EU audits would take place in Brazil as soon as possible but no later than mid-May.

Market prospects for Ireland

Anything that disrupts the world’s largest exporter of beef, second largest in poultry and significant in pigmeat as well, has to create opportunities for its competitors. A formal country ban would wipe 1.8m tonnes from the global market, 140,000t from the EU alone. China and Hong Kong between them took 375,000t last year.

Even in the absence of a complete ban, Brazil's image will have taken a hit. This is not necessarily because of a problem with its meat, because problems can and do arise with a fresh product. The big issue in this investigation is that it suggests there was a systems failure in the internal regulatory process of the industry, involving the people entrusted by the EU and other importing countries to ensure their specification and standards were delivered.

No country is better placed to avail of any opportunity than Ireland

With Brexit looming and extra cattle coming into the system, no country is better placed to avail of any opportunity than Ireland. The Chinese market, which has been worked on for five years by the Department of Agriculture, is thought to be getting very close. There is a view in the industry that if we cannot get the deal closed now with China, when can we? China, however, works at its own pace and is particularly sensitive to food security and quality. It is one of the rare examples of a country that rates imported food products as a higher quality than its own, and Ireland has made good use of this for dairy and pigmeat sales.

Ireland v Australia

Of course, Ireland isn't alone in chasing China as a customer and Australia has just signed a joint statement on enhancing inspection and quarantine cooperation with China. This is intended to significantly improve two-way agricultural trade between the two countries, particularly for Australia’s meat exports. However, Australia isn't the force of two years ago with the drop in kill and restocking because of drought. But it will recover.

Read more

Brazil meat scandal: full coverage