In his interview with the Irish Farmers Journal before Christmas, Philip Carroll, chair of Meat Industry Ireland (MII), focused on what exactly reduced livestock numbers would mean for farmers and factories across the country. As was the case in the Farmers Journal / KPMG report just over a year ago, the road to reducing livestock emissions by 25% means fewer cattle, end of discussion. That means according to MII at least five fewer factories, 6,500 fewer jobs and a €1.5bn hit to the economy.

The Government is being disingenuous when it says nobody will be forced out of livestock. Farmers may not receive a letter telling them to reduce their herd but with resources directed towards promoting alternative land uses, it will have the same effect.

With suckler and beef production the least profitable livestock business consistently, that means it is the most vulnerable and the decline of suckler cow numbers is likely to accelerate.

Dependence on UK

What makes the sector most vulnerable is lack of profitability. Despite huge efforts by the Department and Bord Bia to open and develop new international markets in recent years, Irish farmers remain as dependent on the UK market as ever, supplemented by other European countries. The extent of this will be revealed next week in Bord Bia’s performance and outlook report but beef exports to the US have actually declined in 2022 from an already low base.

China opened and closed again almost immediately while beef sales to Japan have never meaningfully developed beyond selling beef tongues. South Korea, the other big Asian market remains closed.

These were the main premium export markets for US beef in 2022, which along with a strong domestic market delivered a farmgate price around the equivalent of €5.20/kg for US cattle at the end of the year. Irish beef prices on the other hand didn’t manage to keep pace with Poland in 2022.

Cutting cattle gives fast reduction

Against this background it becomes clear how the Government has identified beef production and processing as a category that can be sacrificed to get emissions reduced quickly, even if it doesn’t publicly say so.

The international market is going to get more competitive for the remainder of this decade despite growing global demand for beef.

While Ireland reduces, Brazil forecasts its cattle herd will increase from 187.5m in 2020 to 211.8m by 2030, and its beef exports are forecast to increase to over 3m tonnes annually. Brazil will be able to absorb any extra global demand for beef as indeed will the US and Australia who have no plans to cut production.

Even the UK market is likely to come under pressure from late 2023 onwards. As even the former minister responsible for agriculture George Eustice now accepts, the UK gave away overgenerous access to that market in trade deals with Australia and New Zealand.

British farmers are becoming concerned but it is Irish exports that are under most threat, even if we retain the advantage of being the closest supplier of imports with a well-integrated supply chain through our factories being located in both Ireland and Britain.

Next week Bord Bia will publish its annual Performance and Prospects report, and given beef and dairy prices in 2022 we can expect another record to be set for the value of agrifood and drink exports.

We can also expect that the approval for an Irish grass-fed beef PGI will be granted in the coming weeks as well.

All of this should be the basis of optimism for the sector in the year ahead. However, this simply doesn’t fit into wider Government policy where less is more as far as livestock are concerned.

Forestry is a viable land use alternative for more marginal land while organic farming works best on the most productive fertile land.

If these expand at a meaningful rate, it is inevitable that cattle production will get squeezed out, but it is most unlikely that these alternative farming enterprises can create as much added-value employment in rural areas for the foreseeable future.