Irish and other EU beef producers and their representatives have been widely criticised, usually by people a good distance from the farm gate, for their sustained opposition to the Mercosur trade deal.
The most frequently used push-back against farmers is that the additional 99,000-tonne (t) Mercosur quota is only 1.5% of EU production and, as a result, will have a negligible impact on the EU beef market.
It is also pointed out that it will be phased in over several years, so there will be plenty of time for the EU market to adjust to the new supply situation.
More recently, enhanced safeguards, enshrined in legislation, on action that would be taken if prices fell as imports increased have been offered as extra assurance for farmers.
There is validity, but also flaws in each of these points and a couple of other issues that haven’t been factored in by the EU in relation to the impact of the Mercosur deal on beef.
Strictly speaking, it is correct to say that the 99,000t quota is just 1.5% of EU beef production. It can also be correctly argued that EU production has been and is likely to continue in gradual decline.
Of course, if farm gate beef prices continue to make gains like they have over the past year, the decline may be reversed - but that is another debate.
Not all beef is the same
What is missed in the “just 1.5%” argument is that not all beef is the same, with different parts of the carcase having different values.
The Irish Farmers Journal recently reported on fillet steak retailing at £100/kg (€115/kg).
Steak meat is the most valuable part of the carcase and it also has the greatest price volatility in the wholesale market.
For example, during the summer, the value of striploins climbed to €23/kg, but over a few weeks, as summer headed towards autumn, slumped to €15/kg.
As a typical striploin on an average steer weighs around 6kg to 7kg and there are two striploins on a carcase, this price fall on a relatively small volume of beef knocks €116 of the whole carcase value (7kg x €8 x 2 = €116).
Europe is a particularly high-value steakmeat market and a major market for beef exports from the Mercosur countries.
Therefore, it is wrong to dismiss the potential disruption of the additional beef quota, no matter how long it is phased in over.
As for the phasing-in period, it is true that it means there won’t be thousands of tonnes of beef dumped on the EU market on day one, but after five years, the full quota will be in place.
With the safeguards, it is always better to light a candle than curse the dark.
There will be a response mechanism that will come into play if imports have increased by 10% and prices have fallen by 10%. Critics will say this is too little and too late, but where there was nothing, they bring something.
Standards
There is a further issue that is a particular grievance for farmers that has never been satisfactorily addressed by the EU.
As recently as last year, an EU inspection in Brazil reported that “the current arrangements in place to guarantee that cattle, meat from which is destined for the EU market, have never been treated with oestradiol 17ß for zootechnical or therapeutic purposes, are ineffective” (DG(SANTE) 2024-8087).
Nothing annoys farmers, who feel overwhelmed by bureaucracy, more than reading about imports that are even potentially produced to a lower standard or could have had access to growth promoters that are illegal for EU production.
It doesn’t matter that the risk of beef being imported from cattle that were fed hormones is low nor the fact that even if it was, there isn’t a risk to human health - it creates a feeling of one standard for EU production and another for imports.
Comment - apart from beef, Mercosur is a great deal
It is a reality that for every sector of the EU and Irish economy outside of beef production and processing, Mercosur is a good deal for the EU.
It could also be that if high global beef prices are sustained over a prolonged period, the impact on EU beef may be limited, but there will always be a risk.
It is wrong of the EU to dismiss the risk and the concerns of beef producers. Instead, they would be much better to acknowledge that there will be risks, but that the benefits elsewhere make the deal necessary.
They should also acknowledge the failings their inspections find in our trading partners and put these in the proper context of the EU being particularly zealous in the standards required from EU farmers.
A proper updated risk assessment that correctly identifies and values the potential risk to beef and poultry meat prices would actually be to the benefit of advocates for the Mercosur deal.
Read more
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Irish and other EU beef producers and their representatives have been widely criticised, usually by people a good distance from the farm gate, for their sustained opposition to the Mercosur trade deal.
The most frequently used push-back against farmers is that the additional 99,000-tonne (t) Mercosur quota is only 1.5% of EU production and, as a result, will have a negligible impact on the EU beef market.
It is also pointed out that it will be phased in over several years, so there will be plenty of time for the EU market to adjust to the new supply situation.
More recently, enhanced safeguards, enshrined in legislation, on action that would be taken if prices fell as imports increased have been offered as extra assurance for farmers.
There is validity, but also flaws in each of these points and a couple of other issues that haven’t been factored in by the EU in relation to the impact of the Mercosur deal on beef.
Strictly speaking, it is correct to say that the 99,000t quota is just 1.5% of EU beef production. It can also be correctly argued that EU production has been and is likely to continue in gradual decline.
Of course, if farm gate beef prices continue to make gains like they have over the past year, the decline may be reversed - but that is another debate.
Not all beef is the same
What is missed in the “just 1.5%” argument is that not all beef is the same, with different parts of the carcase having different values.
The Irish Farmers Journal recently reported on fillet steak retailing at £100/kg (€115/kg).
Steak meat is the most valuable part of the carcase and it also has the greatest price volatility in the wholesale market.
For example, during the summer, the value of striploins climbed to €23/kg, but over a few weeks, as summer headed towards autumn, slumped to €15/kg.
As a typical striploin on an average steer weighs around 6kg to 7kg and there are two striploins on a carcase, this price fall on a relatively small volume of beef knocks €116 of the whole carcase value (7kg x €8 x 2 = €116).
Europe is a particularly high-value steakmeat market and a major market for beef exports from the Mercosur countries.
Therefore, it is wrong to dismiss the potential disruption of the additional beef quota, no matter how long it is phased in over.
As for the phasing-in period, it is true that it means there won’t be thousands of tonnes of beef dumped on the EU market on day one, but after five years, the full quota will be in place.
With the safeguards, it is always better to light a candle than curse the dark.
There will be a response mechanism that will come into play if imports have increased by 10% and prices have fallen by 10%. Critics will say this is too little and too late, but where there was nothing, they bring something.
Standards
There is a further issue that is a particular grievance for farmers that has never been satisfactorily addressed by the EU.
As recently as last year, an EU inspection in Brazil reported that “the current arrangements in place to guarantee that cattle, meat from which is destined for the EU market, have never been treated with oestradiol 17ß for zootechnical or therapeutic purposes, are ineffective” (DG(SANTE) 2024-8087).
Nothing annoys farmers, who feel overwhelmed by bureaucracy, more than reading about imports that are even potentially produced to a lower standard or could have had access to growth promoters that are illegal for EU production.
It doesn’t matter that the risk of beef being imported from cattle that were fed hormones is low nor the fact that even if it was, there isn’t a risk to human health - it creates a feeling of one standard for EU production and another for imports.
Comment - apart from beef, Mercosur is a great deal
It is a reality that for every sector of the EU and Irish economy outside of beef production and processing, Mercosur is a good deal for the EU.
It could also be that if high global beef prices are sustained over a prolonged period, the impact on EU beef may be limited, but there will always be a risk.
It is wrong of the EU to dismiss the risk and the concerns of beef producers. Instead, they would be much better to acknowledge that there will be risks, but that the benefits elsewhere make the deal necessary.
They should also acknowledge the failings their inspections find in our trading partners and put these in the proper context of the EU being particularly zealous in the standards required from EU farmers.
A proper updated risk assessment that correctly identifies and values the potential risk to beef and poultry meat prices would actually be to the benefit of advocates for the Mercosur deal.
Read more
Commissioner: We are not negotiating deals for somebody to be a loser
Record Brazilian beef exports in September
What we learned at the world's biggest food trade fair
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