Brazil may have been humiliated on home soil in the World Cup, but they are by far the major winners in the world cup of farming.

That Brazil has risen in recent decades to become an agricultural power is no secret. But this transformation is not only continuing, it is gaining pace.

Brazil’s low feed costs, extensive pasture land and a vast livestock gene pool suggest a large part of the country’s agricultural future lies in animal products.

However, future increases in meat exports and greater access to the global market will depend on trade agreements, such as TTIP and EU-Mercosur.

Production powerhouse

According to The Food and Agriculture Organization, Brazil is the second largest producer of beef (behind the US), the third largest producer of chicken and the fifth largest producer of pig meat. It also expects to harvest about 200m tonnes of grain this season, making our 2.3m tonnes seem like sweepings from the stores.

Export superpower

Brazil exports more beef and chicken than any other country in the world.

The devaluation of the real, the Brazilian currency, has been a complete game changer and given further momentum to the sector by reducing rising costs that were making its exports uncompetitive.

Agriculture exports have more than doubled in the past six years and, according to the Brazilian agriculture ministry, farm exports could surpass $100bn this year. Brazil is now the world’s third largest agricultural exporter, accounting for about 9% of total global exports.

But before it exports one kilogramme of beef, it must feed itself.

Brazil has the fifth largest population in the world, at about 180 million.

Brazil exports $23bn to China, which is now its largest market, overtaking the EU last year.

China banned the import of Brazilian beef in 2012 after reports that a 13-year-old cow died of BSE.

But Brazil is hopeful that China will allow imports of its beef later this year.

Dairy

Brazil is the fourth largest dairy country in the world, producing 32bn litres – six times the size of Ireland’s milk pool.

Milk is especially important to around one million small-scale farmers spread around the country, although a core of 100,000 dairy farmers supply most of the milk.

Milk production has increased by over 20% since 2007.

However, due to growing domestic demand for dairy products, Brazil has gone from being a net dairy exporter to a net dairy importer.

Sugar

It is by far the world’s largest producer of sugar, producing 40m tonnes (about 22% of the world’s sugar) and is the largest exporter, responsible for 42% of total world exports.

Corn

Last year, corn output totalled nearly 80m tonnes, almost double the output of three years earlier.

In a country that has the ability to grow 2.5 crops per year, Brazil has the conditions to quickly double its production of corn to 160m tonnes. Currently, almost 80% of the corn is GM.

Soyabeans

Brazil anticipates harvesting 90m tonnes of soyabeans this season. This would earn it the title of world leader in soyabean production, passing out the US.

Beef

Brazil produces 15% of the world’s beef, about 9.3m tonnes, 18 times more than we produce. The world’s largest exporter slaughters almost 40m heads and exports 400,000 live cattle every year. Last year, it exported over 60,000t of beef to the EU and it has been growing at an annual rate of 22%.

Brazil’s vast landscape makes it perfect for grazing cattle. Most of Brazil’s cattle are grass-fed, with less than 4% finished in feedlots.

Even though the cost of Brazilian beef was driven upwards earlier this year due to unseasonably hot weather and the lowest level of rain for two decades, which resulted in a drop in cattle supplies, the devaluation of the real has helped exports significantly.

Brazil is also a large beef consumer and they ate 84% of what they produced. According to the USDA, total red meat and poultry meat consumption has risen from 31kg in 1993 to almost 90kg per person today.

If trade barriers are opened, quota for 350,000t would have a zero duty tariff. This would be used to import high-value steak cuts, which would have the effect of pushing down EU prices.

The EU-Mercosur trade agreement

Mercosur is an economic and political agreement between Argentina, Brazil, Paraguay, Uruguay and Venezuela, which aims to eliminate obstacles to regional trade and promote the free movement of goods, services and people among member states, and is, in effect, similar in its aims to the EU.

In May this year, the EU-Mercosur trade agreement was re-launched and is similar to that of the Transatlantic Trade and Investment Partnership (TTIP) that is ongoing with the US.

If successful, the agreement would see existing tariffs being cut and non-tariff barriers, such as standards, technical regulations and approval processes, harmonised. The EU is looking for the opening of both markets for services, public procurement and investment.

However, given the divergent standards in the food sector, it is difficult to see that all trade barriers would disappear. There are concerns over the failure of Mercosur to meet EU producer standards on the issues of food safety, animal identification and traceability.

Conclusion

So who would win if Brazil played Ireland in the world cup of farming? This would be a lot easier if it was a level playing field, but it would also depend on our players.

As net dairy importers, and a rising population of middle class, our dairy sector, using players like Carbery and Kerry, would win by applying our dairy technology, innovation and intellectual property.

If we played our beef sector, the odds are that we would lose. With almost all our beef ending up in EU markets, our differentiators are traceability, sustainability and high quality standards.

Brazil has lower costs, similar rearing system, and scale. Its beef is grass-fed and Brazilian farmers have a ready supply of cheap protein and cereals on their doorstep. Not to mention their access to GM and growth hormones.

So where is the place for Irish beef in the world cup of farming? How could we win? It looks like it will have to be high-end cuts into premium markets, which are niche and low volume.

With our output volume unlikely to increase, we should spread this volume around the world, across a range of premium markets. Perhaps we need to move from the UK premiership and reduce our dependence on a single market and set our sights on competing at World Cup level.