Sustainable Irish beef in a global context

Wexford-based beef and tillage farmer, Michael Martin, for instance, provides a global view of the place of Irish beef production in terms of competitiveness and sustainability. While noting that Irish beef production has several advantages, it is competing against countries that have vast scale and are improving their sustainability credentials and developing brand recognition at speed.
Michael identifies opportunities as well as challenges for the Irish beef sector. EU market access, for instance, provides an affluent consumer market of unrivalled global comparison. Our production and processing sectors are highly regulated, delivering strong buyer and consumer trust. In addition, the social sustainability of Irish beef production is recognised and appreciated, though whether that extends to a fully-fledged consumer willingness to pay a premium for that trust and social connection is not as clearcut.

Scale is relative

Irish beef processing is large-scale in the context of Ireland, with four processors purchasing 80 per cent of total production. Even in European terms, Ireland is the largest beef exporter in the EU. But the fact remains that, in global terms, the scale of our beef-processing industry is moderate, at best.
Ultimately, Michael notes, size does matter. The figures speak for themselves. The large-scale producer countries dominate global meat trading. To counteract that scale of dominance, Michael promotes the need for the Irish beef sector to ‘amplify its collective voice’. While there has been considerable rationalisation of Irish processing, there is, perhaps, less evidence of significant cooperation between the main processors. At the same time, they have developed their international beef-processing footprint, particularly in our major UK and EU markets.

A wider engagement in global meat processing has been achieved recently by Dawn, with the acquisition of a majority shareholding in a leading New Zealand meat processor. The full implications and benefits of this for the Waterford-based processor will only become clear over time.

A global assessment

Michael set out to assess global beef production and trends, and to gain a clearer understanding of consumer attitudes towards sustainable beef production. In his paper, he includes an evaluation of Ireland’s position as a beef producer and the risks of losing its social license. Identifying EU market opportunities was also an important objective of Michael’s Nuffield Study, as we approach an almost inevitable Mercosur trade agreement with global beef production powerhouses, including Brazil and Argentina.
Another key finding from Michael’s study relates to the strategic advantages of our EU membership, as alluded to above. This may become increasingly important as livestock numbers continue to decline across the continent in the wake of increased regulation, an ageing and diminishing farm population, and continuing demands to reduce environmental pressures, leading to lower stocking rates and reduced inputs. Higher beef prices globally as well as locally, may arrest this decline. We may even see a reversal of production trends, though the headwinds against increased production would suggest that price and profitability are notable but not definitive factors in cattle production. Nevertheless, as Michael confirms, with production declining in major beef-consuming EU countries, most notably Germany and France, market opportunities should open for Irish product. Reductions in our cattle population may reduce those opportunities somewhat.

Sustainability catch-up

While European and Irish beef production have very high sustainability standards, Michael notes in his paper that strides are being made by South American producers and processors to improve their sustainability credentials.
However, after last month’s exposé by the Irish Farmers Journal of serious shortcomings on the regulation, supervision and use of various animal treatments and antibiotics, there remains a major gap between EU regulatory standards and those of many of our South American counterparts.

Consumer conundrum

Michael recognises the critical role of subsidisation in maintaining and improving animal welfare and quality. This is ‘unmatched by unsubsidised systems outside of the EU’. The consumer paradox, however, Michael confirms, is that, while buyers and consumers demand sustainable beef, they resist paying full production costs.
This contradiction may become even more obvious should the Mercosur trade agreement be fully implemented in the coming decade. While the additional volumes of beef from South America may be relatively modest in the overall scheme of European production, any significant consumer preference for a lower-priced, high-quality beef import, could have an inordinate effect on price at both farm and supermarket shelf levels. Likewise, if lower-priced imported high-end beef cuts are available for foodservice or retail outlets to maintain or improve margins, then it is likely that the choice will be towards a cheaper input without any perceived loss of quality. Unless consumers insist on local/EU provenance, there will be little pushback on imported alternative beef offerings. Right now, while consumer preference surveys suggest a bias towards local provenance, it is not a solid guaranteed demand. Rather, it is, all things – especially price – being the same, consumers will buy local. That is not a very reassuring outlook as South American beef imports increase over the coming decade. The reassurances of protection triggers, should European beef prices fall – always assuming a direct link can be made of price undermining from ex-EU imports – are of some comfort, but only relevant after the price damage is done.

The elusive brand

Michael advocates the introduction of beef-finishing bonuses for smaller finishers. While this has merit, it is unlikely to be enacted across the board, as benefits to processors are difficult to identify, though Angus, Hereford and other breed bonuses, do confer some benefits for all relevant producers.
He suggests improving beef marketing and consumer engagement. That should be a given, with Bord Bia already heavily involved in Irish beef promotion internationally. Whether, ultimately, promotion should extend to a singular Irish beef brand, is another question, not so much because of its likely positive benefits, but because history would suggest it is a non-runner for the privately owned beef-processing industry.

Genetic-driven improvement

This Nuffield study confirms the dominance of dairy beef in the Irish production system. While suckler beef retains a major role in the supply chain, two-thirds of Irish beef is now sourced from dairy herds. Genetic improvement of dairy beef has accelerated in recent years, with the need for economic and environmental sustainability improvements driving progress. Earlier slaughter, along with improved carcase weight and conformation are central to achieving the necessary sustainability improvements.
The calf sales market is already driving milk producers towards beef breeds that maximise market return, so a proposal to support and empower them to make the right genetics choices is probably unnecessary. 
Michael’s overall summary is clear: “Ireland can lead European beef production by combining sustainability with competitiveness. To do so, it must bridge production and perception, ensuring that Irish beef stands for quality, responsibility and resilience”. As with most challenges in the Irish beef industry, it is easier said than done.