Transcript MII Beef Policy

MII Beef Policy Paper
Beef Forum
17th November 2016
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Agenda

Background

Growth Potential

Challenges & Opportunities

Brexit & Response

Other Policy Enablers

Summary
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Irish Beef Sector – Economic Impact

Supports > 70,000 beef farmers and > 10,000 jobs across processing , distribution and transport

Most important indigenous industry - €2.4bn in exports in 2015

Spending on associated farm inputs and livestock trading – almost entirely focussed on the Irish
economy

Huge multiplier effect – sector is crucial to rural economy and regional development

35 beef processing facilities situated in rural towns/communities across the country
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Source: Bord Bia
Beef Sector – Overall Price Development

Always a contentious issue

Irish finished cattle price 35% higher in 2016
versus 2006

Move from ~90% of EU average in 2006 to
now consistently in excess of EU Average
price

Ireland: 90% export dependent. Much of
which is exported into EU markets where
domestic cattle prices are below those
prevailing in Ireland
Source: Bord Bia
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Beef Sector Growth Potential
Beef
+20% output
growth
> €500m
increase in
exports
+80,000t
+3,000 jobs

Food Harvest 2020: Beef export value has increased by >50% on baseline

Further potential to grow our sector – additional revenue and jobs

Shared benefit – increased producer margin and increased processor efficiency

MII forecasts based on increase in beef output from dairy herd – and the strategic
importance of maintaining the suckler herd at existing levels

Growth is already underway (increased calf registrations, increased cattle kill)

Global population growth; Recovery in EU consumption; Lower EU production
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Beef Processing Sector

Transformation from a frozen commodity business in early 2000’s to fresh food supplier to retail
and food service customers across the UK and Europe

€100m invested in past decade – modern, efficient processing infrastructure to assist the industry
in competing on a global scale

Significant investment in ‘feet on the street’ to develop European and International markets

Investing in Innovation – launch of new €8m Meat Technology Centre in Q1, 2017

Supports to sector, including:

BETTER farm programme

Work with Teagasc & ICBF – Unproven bulls, Dairy beef sires, FCE, ADG

Suckler enterprise research work

AA / HE bonus schemes

Funding of Animal Health Ireland
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CHALLENGES AND OPPORTUNITIES
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Challenges & Opportunities


Challenges

Brexit

Producer Viability / Adoption of Agri-tech advances / enterprise scale

Beef Consumption and attacks on red meat

Market Access

Sustainability / AMR

Market requirements (specifications, Clean Livestock)
Opportunities

Global population growth and increasing protein demand

Build on strong reputation – grass-fed beef; safety, traceability, sustainability

Leverage technical advances in breeding and production to drive producer profitability

Improve efficiency through schemes/tools such as BDGP, Carbon Navigator etc.

New markets for Irish beef
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Brexit



Immediate Challenge

Greatest and most immediate challenge facing the agri-food sector

Immediate Sterling impact – competitiveness of Irish beef

Ireland most exposed EU Member State – heavily dependent on UK market

Urgent Government response needed
Longer Term – Trade & Market Access

Future relationship between UK and EU-27

UK to enter Free Trade Agreements with others?

Tariff Schedule & TRQs

Existing EU TRQ arrangements (re-negotiate?)
Longer Term – Technical Issues

Certification (export direct to UK, transiting UK to Continent etc.)

Regulatory divergence

Customs – administration costs, supply chain impacts , etc.
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Brexit (Cntd.)

Immediate Focus

Mitigating measures to help companies manage business and safeguard farmer incomes

Significant additional resources / funding to maintain UK market share and target new
markets

Enterprise Stabilisation Fund & Employment Subsidy Scheme

Address State Aid rules

Increased focus on cost competitiveness (labour, insurance, regulatory, PSO levy etc.)

EU response? – support for suckler herd which is most vulnerable
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Other Policy Enablers
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Market Access

Export Dependence: 90% of beef exported

Brexit: Game-changer. Demands radical response

Maximise Value: no single market takes all the cuts – therefore a full range of markets
required to optimise overall value of carcase

Growth Plans: extra volumes of beef = demand for increased market access

Limit Exposure: address volatility (geopolitical developments, disease outbreaks,
introduction of non-tariff barriers, etc.)

Target Markets: China, South Korea, Vietnam, Ukraine, Middle East

Enhancing Access: Many existing certs have technical restrictions (e.g. Algeria, South
Africa, Indonesia) which limit the potential, incl. age, BSE testing, SRM lists

Market Access Approach & Resourcing:

Director of Market Access. Irish Food Ambassador.

Increased resources in DAFM, including specific veterinary resource
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Producer Efficiency & Viability

Producer viability is critical. Margin is a factor of market price, enterprise productivity &
efficiency and direct supports

Key factors to address:

Suckler herd productivity – calving interval, calves per cow, age at first calving

Dairy herd output – maximise beef characteristics (terminal beef sire, sexed semen)

Grass utilisation – maximise use of our natural competitive advantage

Market specifications including Quality Assurance, clean cattle, age, weight

Knowledge Transfer Programme – critical

Disease control – achieve and maintain an animal health status which optimises the
profitability of the sector. (Market Access & AMR also)
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Sustainability & Climate Change

Climate change policies must recognise the sustainable grass-based production system in
Ireland compared to less sustainable beef production regimes elsewhere in the world

Set industry/sector ambition to have the lowest CO2/kg of beef in the EU by 2025

Economic and environmental sustainability interlinked

Tackle the key parameter of age at slaughter – younger animals

Continued roll-out and support for the Beef & Lamb Quality Assurance Scheme critical

Must ensure that Ireland’s national climate change commitments do not impact negatively on
the potential expansion of the sector
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Consumption Challenge


Challenge:

Falling consumption at EU level

Negative ‘anti-meat’ lobby

3-fold attack: Welfare, Health & Environment
Addressing the Challenge:

Promotion of Irish beef in key markets, building on strong sustainability credentials

Grass-fed beef

Highlight positive aspects of beef as part of balanced diet

Meat & Health a key focus of Meat Technology Centre research programme

Increasing access to EU Promotional Programme
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Trade Deals

Welcome the European Commission report on the "Cumulative economic impact of future
trade agreements on EU agriculture”

Essential that interests of EU and Irish agriculture not sacrificed by EU negotiators in the
pursuit of trade deals

Minimise TRQ volume access and ensure that any new access is on the basis of the ‘natural
fall’ of cuts

Some trade deals beneficial to the beef sector (e.g. EU-Japan, Vietnam, etc.).

Mercosur must be blocked. TTIP(?) – potentially some benefits but must be cautious.

SPS Chapter – non-tariff barriers.
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Competitiveness



Investment:

Address State Aid rules

Access to finance

Significant investment required by the sector
Business Costs:

Ireland out of line in many areas (energy, labour, insurance, finance, legal)

National Competitiveness Council report – need a champion at Cabinet level

Urgent action required by Government (even more so in the context of Brexit)
Innovation/Skills:

Research and innovation key to growth of the sector

Funding must continue for FIRM programme

Meat Technology Centre established

Skills shortage
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Summary

Sector continues to make a huge contribution to the economy

Much progress over last decade

Potential for significant growth – process already underway

Unprecedented challenge of Brexit – needs immediate response

Market Access essential to the success of the sector

Action on other policy recommendations needed, to put the sector on a
sound footing and to facilitate this growth

Major shared agenda

MII members committed to working with all stakeholders to achieve this
potential
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Thank You!
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