Last week’s announcement of a 25% reduction in emissions from agriculture by 2030 makes Ireland a global outlier as a dairy and meat exporting country with a specific sectoral target. The outworking of this means that farmers and factories have to prepare for the reality that less product will be leaving Irish livestock farms by 2030.
As the KPMG report commissioned by the Irish Farmers Journal highlights, the only known way at present to achieve a 25% reduction in emissions from agriculture is to keep less livestock.
As the report modelled the implications of a 21% target and a 30% target, we know that the cut in livestock has to be between 6% and 22% on a beef farm and between 5% and 18% on a dairy farm.
The corresponding drop in farm profitability will be between 13% and 31% on an average beef farm and 7% and 25% on the average dairy farm.
This will mean a loss of between 10,000 and 56,400 jobs and a hit to the rural economy between €1.1bn and €3.9bn as calculated by KPMG.
Less from Ireland not less overall
There has been an argument that Ireland doesn’t have to produce meat and dairy products to supply the world and we will still produce more than we consume. The fact that less Irish livestock-based product will be traded on global markets will have no impact on either global production or global consumption of meat and dairy products.
The recently published OECD-FAO Agricultural Outlook 2022-2031 reveals that the global consumption of fresh dairy products will be 117.9m tonnes higher in 2031 than the 2019-2021 average, increasing from 438.1m tonnes to 556m tonnes.
The vast majority of this extra consumption, 110.4m tonnes, will take place in African and Asian countries, all key export destinations for Irish dairy produce. For developed countries, the growth is forecast to be just 7.5m tonnes.
Beef and sheepmeat consumption
The world will also consume more beef and sheepmeat in 2031 than it does at present. Beef consumption is forecast to increase by 5.7m tonnes carcase weight equivalent (CWE) to 76.4m tonnes in 2031, compared with the average annual consumption of 70.7t CWE between 2019 and 2021. For sheepmeat, the increase in global consumption is forecast at 2.4m tonnes, rising from 15.7m tonnes CWE to 18.1m tonnes CWE.
Growth in beef consumption will take place in Asian and Pacific countries, with China projected to grow by 10% having increased by 50% over the past decade. In contrast, consumption in North and South America and Australia/New Zealand is forecast to decline by 2031. Overall, 5.6m tonnes CWE of the increased beef and 2.1m tonnes CWE of sheepmeat demand is forecast to come from what OECD-FAO describe as the developing world.
Delivering a 25% reduction in emissions from Irish agriculture by 2030 means less beef, dairy and sheepmeat for export unless an as yet unknown solution if found to cut emissions from livestock.
However, the OECD-FAO Agricultural Outlook 2022-2031 projects that production will increase to meet the increasing consumer demand over the next decade, ironically most of which will carry a higher level of emissions per kilo of beef and litre of milk than if it was produced in Ireland.
Aside from this, there is also another useful pointer for the longer-term development of Irish export markets for beef and sheepmeat. The growing Asian markets for beef and sheepmeat are supplied primarily by the US, Australia, New Zealand and South American countries. Ireland needs to progress approval for beef and sheepmeat in China and South Korea in particular as it is just our dairy and pigmeat sectors that are active in these markets at present.
Ireland has taken a lead among the world’s major dairy, beef and sheepmeat exporting nations in setting a reduction requirement of 25% for the sector. If the other exporters were to follow that lead, there would be a huge deficit in supply and therefore increase in price, but as of now there is no evidence of that happening.