Farm Ireland

Monday 19 March 2018

Irish beef faces a battle for slice of US market

Darragh McCullough

Darragh McCullough

I was surprised to hear the Nebraskan rancher I was visiting tell me that he'd really welcome Irish beef into the massive US beef market.

What I hadn't initially realised of course was that he wanted more competition in the US market to prevent prices becoming any more heated in case it turned more people off buying beef in the long-term.

Instead, he wants lots of cheap beef to keep coming in to fill the US's massive annual requirement for burger beef until the US ranchers can rebuild herd numbers again.

For the last four years, successive droughts saw him reduce his cow numbers by 66pc, driving beef prices to record highs of close to €4.90/kg liveweight.

I've seen the efficiency of a US beef system first hand - massive feedlots fattening up to 270,000 animals a year, cheap feed from GM maize, routine use of growth hormones and antibiotics.Suckler farmers able to out-winter cows on rented maize stubbles for just $1/day.

It will turn on the tap of supplies at €2/kg as soon as the weather plays ball again.

In case you're wondering, America's beef farmers scoff at the notion that this dry spell is anything more than part of the cyclical droughts they've been enduring for the last 100 years.

Not only is the US system one of the most efficient in the world, it also produces meat that has a higher marbling of fat, resulting in more succulent steaks.

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So how are we to compete?

The vast majority of the beef that the US imports is to fulfil its massive requirement for ground beef for burgers.

Australia and New Zealand are making a financial killing filling this market at the moment, with the Brazilian heavyweights still out of the game due to Foot and Mouth restrictions.

But the rebuilding of the US herd is already underway, and it may only be four years before the price is on the floor again.

The alternative is to go after niche markets such as 'natural-fed beef' for the premium restaurant market - since most Irish beef will not meet the stringent US 'grass-fed beef' criteria.

We have the advantage of the soft spot that many Americans have for the Irish, and the ministerial delegation in the US this week will play this to the limit.

But are we going to be able to squeeze out local producers who are already supplying this lucrative market, especially when one considers the importance that the discerning consumer places on air miles?

Only time will tell. But US market access will carry weight with the other key markets that we are trying to crack.

Remember, we still haven't been given the official green light into China.

Perhaps that's the real prize at stake - pardon the pun.

Indo Farming