This is a subscriber-only article
Minister for Agriculture Michael Creed leads one of Bord Bia’s biggest ever trade missions to China this week.
He and his predecessor have worked hard alongside Department officials over several years to make Ireland the first EU country to gain access to this lucrative beef market.
With the European Commissioner for Agriculture Phil Hogan also leading an EU business delegation, it is clear that the focus on China isn’t confined to Ireland.
Real work begins now
Despite the prolonged effort that accessing the market required, that was probably the most straightforward bit.
The challenge now for the industry and Bord Bia is to develop the market in a way that maximises the return to Irish beef producers.
The Irish meat industry, unlike dairy, doesn’t have a centralised marketing and selling structure similar to Ornua. Development of markets has been done on a piecemeal basis with each company pursuing their own agenda, often in direct competition with fellow Irish exporters.
Opportunity for young, prime beef
The real cost of this fragmented approach has been paid by Irish farmers who have invested in producing to the highest standards and most demanding specifications. Yet their prime steer beef products often command less in the market than young bulls produced in mainland Europe and Irish steer and heifer prices continually lag behind their counterparts in Britain and the North.
Need to maximise return to farmers
In order for China to be a success for farmers producing the specialist beef product that we do in Ireland, we need to see a price that reflects the cost and effort that is required to deliver that product.
When challenged, the Irish meat processing industry will point to the relative strength of Irish prices compared with the EU average across the whole range of cattle that are processed.
If Irish farmers are to remain in the business of producing a specialised suckler beef product, the market needs to return a value that better reflects the cost of production
Taking this point on board, it is clear that Irish factories have a superb record of performance in delivering top market prices for cull cows. This no doubt reflects the success Irish factories have had in building burger and mince businesses. Dawn and Kepak in particular have a particular interest in the large burger chain market while ABP with its retail strength has a consistent demand for mince. All of this drives a particularly strong Irish market for cull cows.
On prime beef, while Irish factories are competitive at this time of year with their continental counterparts, once the summer flush of cattle comes along, Irish prices drop off the pace.
If Irish farmers are to remain in the business of producing a specialised suckler beef product, the market needs to return a value that better reflects the cost of production which will make it viable in the long term.
This is where China comes into play. They have a 30-month age limit so it is not an option for cow beef in the immediate future.
Blank page
Similarly, notwithstanding the ABP initiative to sign an advance deal, the Chinese market is a blank page and it is up to the Irish meat industry and Bord Bia on how we populate it.
Bord Bia is in the process of investing to increase its capacity and has to provide leadership to the industry on behalf of its levy-paying farmers in this respect. Too often in the past Irish factories have been each other’s best competitors in the marketplace. China is the once-in-a-lifetime opportunity to be different that will be to the benefit of farmer and factory alike and secure a successful future for our industry.
SHARING OPTIONS: