Gaining access to the Chinese market for Irish beef has been a long process. On then Minister for Agriculture Simon Coveney’s mission to China back in November 2014, the potential of the market was obvious, but so too was the importance of following protocol.

There were never going to be any shortcuts taken in the approval process. In the four years since, Minister Coveney and more recently Minister Creed – supported by Department officials and Bord Bia – worked hard to get the access. All deserve great credit.

Consuming almost 10% of all beef traded on the global markets, China offers great potential for the Irish beef sector. However, the challenge of turning this potential into reality for the benefit of farmers should not be underestimated.

China is a high-volume destination but it is a highly complex and competitive market. As our team details, the main suppliers of beef into China are Brazil, Argentina, Uruguay and Australia. Not only will Ireland struggle to compete on price, but also scale.

We look at ABP Food Group as a major player in Ireland and the UK but it is dwarfed by many of the global processors that have a footprint in nearly all the main beef exporting regions of the world.

In the wake of securing approval, there is the obvious temptation to rush into the market with product. However, now is the time to ask what Ireland is going to offer China and where we intend to position our beef in the market. Securing access to China will do nothing for Irish farmers if we find ourselves competing in the commodity market.

So, how can we differentiate our beef in a vast market where the average consumer has never heard of Ireland? Perhaps the answer lies within a report produced by Bord Bia in 2010 entitled Pathways for Growth.

Securing access to China will do nothing for Irish farmers if we find ourselves competing in the commodity market with South American product

Prepared by two Harvard professors, the stated objective was to identify new export opportunities for the Irish food and drinks industry.

Three particular challenges to Ireland charting a successful pathway in global markets were identified: fragmentation and lack of scale; limited consumer understanding/focus in export markets; and low investment in the future of the sector. The strategy put forward to overcome these challenges suggested that Irish exporters:

  • Be encouraged to collaborate rather than compete (with co-opetition the buzzword in the industry).
  • Focus on innovation leading to differentiated market positions.
  • Brand-build, based around customer feedback as a means of capturing greater market share.
  • Pathways for Growth may have been produced eight years ago but there is obvious merit in dusting it down.

    Is China the blank canvas that would allow for an industry-wide approach to be adopted towards maximising the potential returns in the beef market? Clearly the chances of pushing Irish beef up the premium ladder are greater in an environment where, through collaboration, we have the necessary scale required to deliver a branded product range that is innovative and can be differentiated in the marketplace.

    The alternative is for a scatter-gun approach where each Irish processor goes on a solo run into the market and in 12 months’ time, we find Irish beef competing in the commodity market with South American product.

    Such an outcome would see access to the Chinese market delivering little for Irish farmers. If faced with a similar challenge in the dairy industry, the obvious response would be to charge Ornua with developing the market. Unfortunately, the same option is not available in the beef sector.

    Nevertheless, Irish processors have and will continue to receive huge support from State and semi-state organisations in establishing their footprint in China – this should give Government some leverage in encouraging the industry to adopt a collaborative approach to developing the market in the interest of farmers.

    DAIRY-TO-BEEF: the right system will deliver for all farmers

    This week, Adam Woods looks at the research into the profitability of different dairy calf-to-beef systems.

    While some of the systems provide a viable alternative to existing cattle enterprises, his advice is to crunch the figures.

    Achieving high margins in these systems depends on high animal performance and a high level of liveweight gain from grazed grass.

    Cashflow management is also critical. Dairy calf-to-beef systems are mistakenly viewed as being low-cost. While cost of entry may be relatively low, bringing animals through to the point of slaughter is a cash-hungry process.

    Ensuring profitable dairy-to-beef systems are developed is in the interests of all farmers. It would be short-sighted for the dairy sector to simply focus on gestation length and ease of calving.

    More work needs to be done on identifying breed lines that can deliver on both, but with improved beef traits such as growth rate and carcase conformation – AI companies have a clear role to play in this regard.

    Meanwhile, we look forward to seeing the results of the sexed semen trial taking place on Irish farms this spring.

    TILLAGE: Crop Protection

    Many of the challenges faced by tillage farmers are outlined in our Crop Protection magazine, free with this week’s edition. This is an essential reference document for tillage farmers and the product listings for fungicides, herbicides, growth regulators and insecticides are widely referenced throughout the year by growers.

    The magazine also provides technical updates on developments in disease, grass weed and insecticide resistance. These problems continue to be exacerbated by the significant decrease in the new actives coming to market and there is now real concern that Brexit will result in even slower registration of new actives.

    There is little doubt but that integrated management techniques will form an increasing element of future husbandry. This should be seen as a useful means of reducing dependence on expensive inputs over time.

    Irish agriculture needs a healthy and prosperous tillage sector with good integration into other sectors.

    DAIRY: decisions to support milk price welcome

    We were critical of Glanbia Ireland’s board in March when it cut the February milk price by 3c/l as members struggled to deal with difficult conditions. The decision last week to effectively hold the March price through co-op support should be recognised.

    As Odile Evans reports, most other co-ops followed. Some have questioned the strategy of processors pulling the base only to top up the price with a range of support schemes while others questioned the logic of supporting a base price that remains above 28c/l excl VAT. However, both are arguments for another day. With weather conditions putting severe pressure on farmers’ cashflow, the decision by most processors to effectively hold price will be welcomed.

    AGRIBUSINESS: LacPatrick in talks to secure supply base

    As we revealed on Wednesday on farmersjournal.ie, LacPatrick co-op intends to seek a joint venture, partnership or merger with another milk processor.

    David Wright details here, how events came to a head on Tuesday night after suppliers saw milk price fall to a base of 25p/l following a cut of 4.4p/l over the past two months. With prices significantly lagging behind other co-ops, LacPatrick was clearly at risk of seeing its supply base eroded and had to move quickly.

    With over 1,000 farm families depending on the co-op for an income, it is critical that any deal is reached quickly and that the future of the co-op’s farmer suppliers is guaranteed.