The Beef Crisis Explained

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EU BEEF CRISIS
The Beef Crisis Explained

Irish and EU farmers are in the midst of an unprecedented beef crisis.

Find out more on why this is happening, what IFA is doing about it and what more needs to be done.

Where are Irish, EU and UK Cattle Prices?

At the current Irish steer base price of €3.45-3.50/kg, Irish beef prices are down 45c/kg on last year or €160/head.

EU beef prices are down 6% on last year, with steer prices down 9.7%.

For w/e July 21st the EU Commission reported the average EU R3 male price at €3.51/kg excl. vat.

R3 Irish steers were €3.53/kg and UK steers were €3.70/kg.

Beef Farm Incomes 2018

The Teagasc 2018 farm income survey shows average cattle rearing incomes at €8,813 and Cattle other incomes at €14,408.

The severe beef price cuts and the on-going cuts to direct payments, the severe beef price cuts have left beef and livestock farmers in a dire financial crisis.

For w/e July 21st. the EU Commission reported average EU R3 male price at €3.51/kg excl. vat.

R3 Irish steers were €3.53/kg and UK steers were €3.70/kg.

How much beef does the EU Import?

In 2018, the EU imported 341,053 tonnes of beef from third countries onto the EU single market.

Mercosur countries (Brazil, Argentina, Uruguay and Paraguay) account for 268,988t or 79% of all EU imports.

Brazil is the largest importer with 140,243t, followed by Argentina at 69,996t, Uruguay at 52,462t and Paraguay at 6,287t.

What are Tariff Rate Quotas?

Tariff rate quotas (TRQs) allow products imported within a certain quota to enter the European Union’s market at a lower or zero tariff rate than for quantities outside the quotas.

How much beef is imported under TRQ’s?

EU Commission data for 2016-2018 shows that 65% of all beef imports are in TRQ (in quota) and 35% imported paying full duties. For Brazil, 41.5% of all imports are in quota and 58.5% out of quota.

What did the recent EU/Mercosur deal concede on TRQ’s?

The EU granted the Mercosur countries access for an additional volume of 99,000t TRQ at 7.5% tariff and abolished a 20% tariff rate on the Hilton quota for 69,000t.

How does South American exporters cherry pick the EU steak market?

South American exporters use the preferential access through TRQ’s to target large volumes of steak cuts and cherry pick the high value EU steak market. In the EU market, steak cuts make up 10% of the volume but account for 30% of the value of the animal. As a result, large volumes of South American imports are capturing a disproportionately high level of the valuable EU steak market at the expense of EU farmers.

Market Balance

Currently in the EU beef market is 102% self-sufficient. At 341,000t, third country imports account for 4.4% which is undermining the EU beef market.

The EU Food and Veterinary Office

The EU Food and Veterinary Office (FVO), based in Co Meath, has the responsibility to assure effective control systems and to evaluate compliance with EU standards in the EU and with third countries in relation to exports to the EU market.

What did the FVO say about Brazil?

Over many years, the FVO has consistently highlighted the failure of Brazil to meet EU production standards across the key areas of traceability, food safety and animal health controls.  In the most recent EU FVO report on Brazil, they state ‘written guarantees’ given by the Brazilian authorities were ‘not reliable’.

What are the production standards in Brazil?

• Brazilian cattle are not tagged and there is no traceability.
• Hormones, beta agonists and other growth promoters are widely available. These products are all illegal and banned in the EU.
• Brazil has endemic Foot and Mouth disease, which is a constant risk.

What about the Environment?

The EU Commission Joint Research Centre has found that Irish beef is four times more carbon efficient that Brazilian production. Greenhouse gas emissions from Brazilian beef are estimated at 80 kgs CO2-eq/kg compared to 19kgs for Irish beef.

And the Rainforests?

In Brazil, the equivalent area of a football pitch of Amazon rainforests is cleared every single minute to make way for cattle ranching and additional beef exports.

What did Commissioner Hogan say about standards?

Recently, Commissioner Hogan assured European producers and consumers that “no product will be allowed enter the EU market unless it complies 100% with EU standards”

It is clear from the FVO audits that Brazil and other South American countries fail to meet EU production standards. The EU cannot allow beef into the EU that would be illegal to produce here.

Stop Substandard Beef Imports

IFA is calling on the European Commission to act on the Irish and EU wide-beef crisis.

What is IFA campaigning for?

The key measures being sought by IFA are:

  • An immediate ban on all substandard South American beef imports
  • A further fund to compensate farmers who supplied cattle post-May 10th 2019 and are currently losing €4m per week on beef prices
  • €1bn Brexit fund of market supports and direct aid for farmers
  • An EU campaign to promote environmentally sustainable EU beef production
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