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Meat Industry Ireland

Meat Industry Ireland. Joint Oireachtas Committee on Agriculture 4 th March, 2014. Presentation by. Overview. Snapshot of where we are Beef Industry performance over the last decade Current market situation Market specifications Young bulls Real threats & challenges Conclusions.

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Meat Industry Ireland

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  1. Meat Industry Ireland Joint Oireachtas Committee on Agriculture 4th March, 2014 Presentation by

  2. Overview • Snapshot of where we are • Beef Industry performance over the last decade • Current market situation • Market specifications • Young bulls • Real threats & challenges • Conclusions

  3. Snapshot – a lot done under FH2020 • 40% increase in finished cattle price over last 4 years • Additional €1.5 billion to Irish beef farmers • 101% of EU male cattle price / 107% of ‘all-category’ EU price • 3rd highest steer/cow price; 5th highest heifer price • €2.1 bn beef exports in 2013 (+10%) • Irish beef exports have increased by almost 35% since 2010 • Moved from 75% to 87% QA coverage

  4. +5% Ireland exporting 90% of beef output +1% +60%

  5. Irish Beef Sector Performance of the last decade

  6. Irish beef listed with more retailers than beef from any other origin 2001 2014 75+ 27

  7. Sales of Irish beef to Retail (‘000 tonnes cwe) Source: Bord Bia

  8. Irish R3 Steer Prices, 2001 to date (c/kg) Cattle price up from €3/kg in 2010 to €4+/kg Source: Dept. of Agriculture

  9. Performance of Irish Cattle PriceR3 steers c/kg excl VAT 2013: €4.07/kg 2012: €3.86/kg 2011: €3.44/kg 2010: €2.91/kg

  10. Current Market Situation Production, Consumption, Prices

  11. Market Overview • Consumption under pressure – weaker consumer spending power • Many key export markets in recession • No significant promotional activity in beef category - beef relatively expensive compared with chicken & pork; • Manufacturing beef trade weak • Significant volumes of additional pork on EU market due to Russia ban • Significant stock levels across Industry – product not moving at present • Irish cattle slaughterings up 7% • Production up in EU • UK prices falling since October – only starting to stabilise now

  12. GB Cattle Prices

  13. EU beef production trend 2012 - 2014 EU beef production declined by 2.2% in 2013. A recovery in production of 1.1% is forecast for 2014 +2% +0.8% N/C. +2.6% +1.0% +7% +3% -1% Source: EU working beef forecasting group

  14. Beef consumption decline in 2013 -2.1% Source: EU working beef forecasting group

  15. Retail sales of beef throughout EU Home Market (52wks to 5 Jan) Volume: -5.0% Av Price: +4.1% Germany (Jan to Dec) Volume : -1.5% Average Price: +3.5% G. Britain (52wks to 5 Jan) Volume: -2.9% Av Price: +7% France (Jan to Dec) Volume: -4.0% Av Price: +4.2% Italy (Jan to Dec) Volume : -3.7% Average price -2% Spain (Jan to Dec) Volume : -4% Av Price +2%

  16. Low consumer demand for beef is holding back the market, as rising beef prices in the past few years have turned some on to other meats. Farmers Weekly 27/2/2014

  17. Producer Prices: Ireland vs. Europe

  18. Producer Prices: Ireland vs. Europe & UK

  19. Market Specifications • Steer / Heifer grass-fed – unique selling point – clear message from consumers & key customers for years now • FH2020 & Beef Activation Group reports highlighted market specification issues • Post FH2020 MII members introduced QPS – rewarding quality • In-spec bonus – QA and specification • Young Bulls – UK retail requirement is for <16 month only. Limited opportunity for some older YBs in Continental markets – processor specific • Must have Producer-Processor arrangement for YBs over 16 months. This has been clearly communicated by FH2020 Report and by Individual processors • MII has prepared a draft Industry Communication to again highlight importance of specification adherence - farmer gets a better price & industry can better market the output

  20. Young Bull Kill – YTD(head/week) Total kill up 7% ytd

  21. Real Threats/Challenges • EU Trade Deals – Increased tariff-free imports • EU-Canada CETA • EU-US TTIP • EU-Mercosur • On-Farm Efficiency • Significant advantage still to be achieved behind farm-gate • Industry has supported initiatives

  22. Conclusions • Strong beef sector marketing performance & price delivery • Weakening price due to market conditions, but prices still at upper end of EU market • In-spec essential – will deliver the best returns • Industry responding to short-term supply issues • Positive outlook in medium term • Challenge – Trade Deals / On-farm productivity

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