EU migrant labour down 26% in NI since Brexit vote
Several agri-food business leaders have written to the prime minister Theresa May to highlight concerns about the availability of labour in NI.

The number of migrant workers in Northern Ireland (NI) from countries within the EU’s Single Market has fallen by 26% since the Brexit referendum in June 2016.

Leaders from 21 business organisations in NI, including several from the agri-food industry, have written to prime minister Theresa May to highlight their concerns about the availability of labour.

Uncertainty

“A combination of exchange rate movements and the uncertainty facing migrants to the UK, has meant that fewer EEA workers are coming to Northern Ireland and more are leaving,” the letter reads.

Signatories of the letter include Ulster Farmers’ Union president Ivor Ferguson, NI Meat Exporters’ Association chief executive Conall Donnelly, NI Food and Drink Association chair Brian Irwin and NI Grain Trade Association chief executive Robin Irvine.

The first signatory listed is Confederation of British Industry (NI) chair and Fane Valley chief executive Trevor Lockhart.

NI solutions

The letter states that with a tight labour market in NI, there is a risk that companies operating on both sides of the Irish border will switch their focus to facilities in the Republic of Ireland.

The letter states that local industries have continually raised concerns over the past 12 months

The business organisations have asked the prime minister that solutions to the problem have NI flexibility to reflect differences in lower average regional salaries in NI compared with the rest of the UK.

The letter states that local industries have continually raised concerns with both the migration advisory committee and the UK government for the past 12 months.

“At no stage in the last year, have we received any indication that here has been serious consideration given to the solutions required to address our concerns,” the business organisations said.

“We are appealing for your support to deliver solutions to this worsening problem,” the letter to Theresa May reads.

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Exclusive: cheap food imports threat from no-deal Brexit plans
A large tariff-free quota would see South American beef competing directly with British and Irish beef.

Irish livestock farmers face the real prospect of competing with cheap food imports in the British market in the event of a no-deal Brexit, if proposals put to the Theresa May’s cabinet on future tariffs are agreed this week.

The Irish Farmers Journal can exclusively reveal the plan being put to UK ministers for agreement. It is driven by three specific objectives:

  • Keeping food prices stable to British consumers.
  • To safeguard British farmers.
  • Not to undermine future negotiations on trade with other countries.
  • As a result, it is understood that unilateral zero tariffs will not be introduced, as it would leave the UK government in a weak negotiating position when trying to secure future deals.

    Instead, tariffs will be applied that will vary sector by sector. The arrangements are seen as temporary, until such time as the UK is able to agree trade deals post-Brexit. However, it is still recognised that the temporary regime could last years.

    Under the plan, goods that are not routinely produced in the UK (such as bananas or oranges) are likely to face very low or zero tariffs.

    It is bad news for the Irish beef industry, and potentially bad for the UK beef industry as a whole, as it will be competing against much cheaper imported product

    In sectors that have UK producer prices close to the global average, the proposal is for tariff rates to also be set at relatively low levels. That group of sectors is thought to include the pig industry, while low tariffs could also apply on some dairy products.

    There is then what are classed as "sensitive" sectors and products, which is believed to include some poultry and dairy products, and also the wider UK beef industry.

    Beef

    The plan put to ministers on beef is for the UK to adopt the same World Trade Organisation (WTO) tariffs that apply on beef in the EU, to stop the market being flooded with much cheaper product from South America, the US and Australasia. However, the UK would continue to retain its share of existing EU deals that allow in some beef tariff-free, or at preferential rates (Hilton quota).

    With the Republic of Ireland being the major exporter of beef into the UK market (supplying 205,000t in 2018), accounting for over 70% of all UK beef imports, there would still be a massive gap to be filled.

    It is understood that the UK will offer tariff rate quota to cover the existing amount of EU imported beef. That would allow this amount of beef to come in tariff-free, but it would be done on the principle of erga omnes – in other words, any country in the world could fill the quota.

    It is bad news for the Irish beef industry, and potentially bad for the UK beef industry as a whole, as it will be competing against much cheaper imported product.

    Sheep

    That leaves the UK sheep sector, which the UK government accepts is the sector most exposed to a no-deal Brexit.

    The plan for it is to adopt the EU tariff schedule in full. On the face of it, that might seem like a good outcome, but the problem still remains during peak season. If the UK industry faces a high tariff on exports to France, the British market will be oversupplied, and the market risks a severe crash.

    In addition, the UK government has also already accepted that it will take on half of the New Zealand (NZ) EU tariff-free lamb quota after Brexit, effectively allowing an additional 114,184t onto the UK market.

    Given that the UK sheep industry is already 100% self-sufficient in lamb, that additional NZ lamb just makes a bad problem look much worse.

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    News in-brief from Northern Ireland
    Firm trade at suckler sale, and Chesney calls for improved marketing of suckler beef.

    Marketing of suckler bred beef from NI

    Ulster Farmers’ Union beef and lamb chair, Sam Chesney, has called on the Livestock and Meat Commission (LMC) and Invest NI, to do more to market beef from the suckler herd.

    “NI beef is sold on the back of the suckler image of hearty-looking cattle, grazing lush, green fields.

    "However, suckler farmers don’t gain when it comes to this marketing. The quality of their beef is second-to-none and producers should be paid accordingly,” said Chesney.

    He also pointed out that the extensive nature of suckler beef brings multiple benefits, including management of habitats, and that grassland is important when it comes to carbon sequestration.

    “As an industry we need to ask whether we want sucklers. If we do, then we must come up with radical ideas to encourage consumers to recognise what it offers and to improve the depressing profitability statistics,” he said.

    Firm trade at suckler dispersal

    A special clearance sale of 70 in-calf suckler cows for David and Matthew Brownlee, Loughgall, went under the hammer on Thursday of last week at Markethill Mart, with all lots selling to an average of £1,370.

    Attracting strong buying interest, in-calf cows sold to a top price of £1,850 for a Belgian Blue animal, followed by other exceptional lots making £1,800, £1,700 and £1,650.

    A Hereford bull, used as the herd stock sire, sold to £1,700. The Brownlees have converted to dairying.

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    NI milk production hits record level
    Milk output from Northern Ireland farms has continued to increase in 2018.

    The latest DAERA statistics show that NI milk production totalled 2.34bn litres in 2018, up 60m litres on the 2.28bn from 2017.

    The 2018 figure is the highest production ever recorded in NI. In the last decade, annual NI milk output has risen by 440m litres.

    Milk price

    While milk output increased in 2018, the farmgate milk price was down slightly, averaging 28.68p/l across the year, compared with 28.73p/l in 2017.

    However, the 2018 figure was significantly higher than in 2016 when markets were in a slump and farmgate prices averaged 20.24p/l.

    For a 1m-litre producer, this price difference is worth an extra £84,400 in annual milk sales.

    The highest milk price recorded in recent years came in 2013, when prices averaged 31.34p/l.

    Britain

    Looking at prices in Britain, the 2018 average there was 29.45p/l, which is 0.77p/l ahead of NI.

    However, that gap is narrower than in recent years.

    Over the last five years, milk prices in Britain have averaged 27.67p/l, compared with 25.63p/l in NI.

    EU intervention

    Meanwhile, just 504t of skim milk powder (SMP) were sold out of EU intervention stores last week, despite bids for 2,172t and expectations that all stocks would be cleared.

    However, of all bids received, just 27% met the minimum price of €1,662/t, which is the highest intervention price since June 2017 and reflects the rising demand for SMP.

    After last week’s auction, just over 3,000 of SMP remains in EU intervention stores, with the vast majority of product held in Spain. The UK has 389t of powder still in store.

    Expectations are that the remaining stocks will be sold at the next tender on 19 February.

    Commodity prices

    With intervention stocks nearly gone, commodity auctions have started 2019 strongly, with the latest GDT index price reaching its highest level for eight months at US $3,265/t.

    This converts to a milk price of approximately 32p/l, before applying any costs for processing, etc – normally estimated at 4p-5p/l.

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