It’s been a challenging year for beef exports.
Last Friday’s meat marketing seminar from Bord Bia heard from a number of Bord Bia’s market specialists who reviewed 2020 and gave their views on what 2021 may bring.
Challenges remain with COVID-19 and gaining access again to the Chinese market but there are some positives to take for 2021.
Ireland exported 472,000t of prime beef (carcase weight equivalents excluding offal) in 2020, down 3% on 2019 levels.
The value of beef exports fell by 2% in 2020 based on 2019 levels. The UK market dropped in value by 7% taking 44% of all Irish beef exports in 2020.
The EU accounted for 45% while international markets accounted for 11% of Irish beef exports.
In terms of international markets, growth was seen in the US, Canada and the Philippines with the Philippines accounting for €53m worth of beef exports in 2020.
In the period from February to July 2015 Irish beef exports to the US were valued at €500,000.
This has grown to €31.8m for the period from January to October 2020 and the commencement of beef burger exports to the US in May 2019 has been central to growing this value.
In a live participants poll conducted during the seminar on Friday morning, Bord Bia asked participants what markets they would be prioritising for meat exports in 2021.
Forty four per cent of respondents said they would be concentrating on EU markets, 40% said they would be concentrating on international markets with just 16% saying they would be concentrating on UK markets in 2021.
Table 1 outlines the key markets for Irish beef in 2020 and the changes that have occurred compared to 2019 in terms of exports.
While the beginning of 2020 saw a general slow climb in beef prices, the impact of COVID-19 hit in March 2020 and the average price for 2020 ended up just €0.02/kg on 2019 prices.
The average price in 2020 was €3.62/kg excluding VAT compared to an average price of €3.60/kg excluding VAT in 2019.
This compared to an average UK price of €4.01/kg excluding VAT during 2020, representing a €0.39/kg average price differential between the UK and Ireland in 2020.
This equates into a price differential of almost €150 on a 380kg steer.
The 2020 Irish average price was €0.09/kg ahead of the average EU price, which was €3.53/kg, excluding VAT on 2020.
Bord Bia markets specialist Mark Zieg outlined that there was a shift to killing young animals in 2020 and this led to a 40,000 increase in the cattle kill numbers in 2020.
This will likely transfer into a positive, with an estimated 80,000 less cattle coming through for slaughter in 2021. It is down to having higher live exports in 2019.
In early 2020, Bord Bia predicted a fall of 50,000 in the 2020 kill. However, this did not materialise.
This has been put down to more dairy-beef animals being slaughtered at a younger age in 2020.
Zieg said: “If we look at the most recent AIMS database figures on 1 November we see that there are almost 80,000 less cattle aged between 24 and 36 months.”
Ireland’s cattle kill came to 1.8m head in 2020 and this could drop to 1.72m head in 2021.
Zieg also outlined the carcase weight changes in the 2020 cattle kill. Figure 2 shows the carcase weights for different categories of stock in 2020.
Heifers saw the highest jump of 5kg to 319.3kg, while cows came in 1kg less at 315.7kg compared to 2019 weights.
EU beef exports increased by 1% in 2020, while imports decreased by 10%.
EU beef exports are forecast to increase by 4% in 2021 with imports expected to stay similar to 2020. International markets are of growing importance.
Hong Kong took the largest share of EU beef exports taking just under 40,000t in the period from January to September 2020 and accounting for just over 10% of total exports.
Ghana came in as the second highest destination for EU beef exports taking just over 35,000t (9.5% of exports) in the period from January to September 2020. This was up 21.3% on the same period in 2020.
The seminar included a market access presentation from the Department of Agriculture assistant secretary Sinead McPhillips.
She outlined priorities for market access in 2021 and said: “The overriding priority from our point of view is to regain access for beef to the Chinese market.”
Beef exports were voluntarily suspended by Ireland in May 2020 following the confirmation of an atypical BSE case in an Irish cow.
McPhillips said: “There has been intense communication between Irish and Chinese authorities at both Government, diplomatic and at a technical level and we are confident that we will regain access.
At the moment, the Chinese government, like all other countries, is concentrating on Covid-19 issues and this has delayed regaining access.”
The Chinese market is an extremely important market for global meat exports with China predicted to import 10m tonnes of meat in 2020.
While the majority of these imports are made up of pork and chicken, a growing middle class has been slowly switching to beef and China is expected to import 2.5m tonnes of beef in 2020, up from 1.6m tonnes in 2019.
The majority of this is imported from countries such as Brazil, Uruguay, Argentina and Australia. Outbreaks of African swine fever (ASF) have driven these meat imports.
It was hoped that Ireland could capitalise on these changing trends and increase our beef exports to China in 2020.
Chinese authorities are particularly sensitive to anything in relation to COVID-19 and the latest surge in cases in Ireland is likely to further delay any resumption in exports.
Given the travel restrictions that are in place, McPhillips said a virtual inspection may be an option instead of an in-person visit.
There are concerns that it could take a long time before food service outlets get back to normal with Gira, the meat market experts, expecting it to be the last quarter of 2021 before European food service establishments return to normal trading.
There are some who are able to operate on a takeaway basis and as online ordering facilities but many will see disruption to footfall until autumn 2021. This is important for Ireland as 41% of Irish beef exports to the continent are to food service businesses.
While food service establishments have seen widespread disruption due to COVID-19, retail sales of beef are all up which will help to offset some of the food service disruption.
Rupert Claxton from the meat market specialist, Gira, was more downbeat about the impact that COVID-19 will have on meat markets in 2021.
EU meat market
He said: “The EU meat market will be slow for the first half of 2021 as COVID-19 continues to spread in the current third wave of the disease. We will see further lockdowns which will see reduced food service demand and, more importantly, this will result in weaker consumer confidence. We also have to be aware of the long-term economic impact of COVID-19, which will weaken demand at all levels, notably in EU and US.”