The significance of Irish beef returning to the streets of New York this week should not be overlooked. The necessary approval by the United States Department of Agriculture (USDA) to allow the trade resume is a global endorsement of the production standards on Irish farms and across our processing facilities. The USDA stamp will undoubtedly help open further doors for Irish beef – particularly China. Within Europe, it allows us to defend the integrity of our product against those seeking to devalue it in the eyes of the consumer merely for commercial gain.
This week’s trade mission, led by Minister for Agriculture Simon Coveney, will serve as an excellent platform from which to develop the US market. Once again, Minister Coveney, with the support of Bord Bia, has proved himself to be extremely competent in this ambassadorial role.
However, it is now that the real work begins. We should not underestimate the challenges that lie ahead. Nor should farmers be of the view that US access will immediately translate into higher market prices. At the very least it will be a 12-month process during which a lot of political hurdles will have to be cleared if the market potential is to be fully exploited for farmers.
Some of these challenges have emerged over the course of the week in relation to quotas and product licences. As flagged by the Irish Farmers Journal in early January, the US has a strong pedigree in using regulatory measures to restrict imports into what may appear to be an open market. We have seen how licences and quota management have been used to protect the US dairy market from cheese and butter imports, with particular implications for the development of the Kerrygold brand.
As Phelim O’Neill highlights on pages 20-21, a similar scenario appears to be playing out with regards to beef imports. At this point, access has only been granted for high-priced steak cuts from Ireland with no licence agreement in place for manufacturing beef.
Furthermore, Ireland will be forced to fight it out with countries such as Barbados and those in Central America for a 64,000 tonne import quota which is allocated annually on a first come, first served basis. Although this wasn’t fully used last year, the sharp rise in US beef prices is seeing increased competition among exporters. Almost 4,000 tonnes has already been committed this year – up 40% on the same period in 2014. The competition for this quota pool will only intensify as other EU countries attempt to secure export approval. Trying to develop a premium market that will require a year-round supply of quality Irish beef in such an uncertain environment will be extremely challenging.
Minister Coveney and Bord Bia have put a lot of work into opening the US market and deserve plaudits for their success. It is encouraging to see that the ABP Food Group is prepared to invest in developing the market and not merely rely on its links with UK retailers.
However, there can be no let-up in efforts if farmers are to see real benefits – we only have our foot in the door at this point. We are assured that it is only procedural issues in securing access for manufacturing beef. However, getting further concessions may prove more difficult than anticipated.
There is no doubt that US officials are now focused on negotiations around the Transatlantic Trade and Investment Partnership (TTIP).The strategy appears to be to maintain EU relations by conceding partial market access while at the same time leaving significant barriers in place that can be traded around the negotiation table at a later stage.
The significance of Irish beef returning to the streets of New York this week should not be overlooked. The necessary approval by the United States Department of Agriculture (USDA) to allow the trade resume is a global endorsement of the production standards on Irish farms and across our processing facilities. The USDA stamp will undoubtedly help open further doors for Irish beef – particularly China. Within Europe, it allows us to defend the integrity of our product against those seeking to devalue it in the eyes of the consumer merely for commercial gain.
This week’s trade mission, led by Minister for Agriculture Simon Coveney, will serve as an excellent platform from which to develop the US market. Once again, Minister Coveney, with the support of Bord Bia, has proved himself to be extremely competent in this ambassadorial role.
However, it is now that the real work begins. We should not underestimate the challenges that lie ahead. Nor should farmers be of the view that US access will immediately translate into higher market prices. At the very least it will be a 12-month process during which a lot of political hurdles will have to be cleared if the market potential is to be fully exploited for farmers.
Some of these challenges have emerged over the course of the week in relation to quotas and product licences. As flagged by the Irish Farmers Journal in early January, the US has a strong pedigree in using regulatory measures to restrict imports into what may appear to be an open market. We have seen how licences and quota management have been used to protect the US dairy market from cheese and butter imports, with particular implications for the development of the Kerrygold brand.
As Phelim O’Neill highlights on pages 20-21, a similar scenario appears to be playing out with regards to beef imports. At this point, access has only been granted for high-priced steak cuts from Ireland with no licence agreement in place for manufacturing beef.
Furthermore, Ireland will be forced to fight it out with countries such as Barbados and those in Central America for a 64,000 tonne import quota which is allocated annually on a first come, first served basis. Although this wasn’t fully used last year, the sharp rise in US beef prices is seeing increased competition among exporters. Almost 4,000 tonnes has already been committed this year – up 40% on the same period in 2014. The competition for this quota pool will only intensify as other EU countries attempt to secure export approval. Trying to develop a premium market that will require a year-round supply of quality Irish beef in such an uncertain environment will be extremely challenging.
Minister Coveney and Bord Bia have put a lot of work into opening the US market and deserve plaudits for their success. It is encouraging to see that the ABP Food Group is prepared to invest in developing the market and not merely rely on its links with UK retailers.
However, there can be no let-up in efforts if farmers are to see real benefits – we only have our foot in the door at this point. We are assured that it is only procedural issues in securing access for manufacturing beef. However, getting further concessions may prove more difficult than anticipated.
There is no doubt that US officials are now focused on negotiations around the Transatlantic Trade and Investment Partnership (TTIP).The strategy appears to be to maintain EU relations by conceding partial market access while at the same time leaving significant barriers in place that can be traded around the negotiation table at a later stage.
SHARING OPTIONS