Strong Pound will put damper on NI beef

Friday 20 March, 1998

By Robert Harris

THE ending of the beef export ban in Northern Ireland has been welcomed as a great step forward in the province. But other factors, notably the strong Pound, will prevent a sudden flood of exports and higher prices.

“The lifting of the ban is superb news – and so decisive,” says Will Taylor, deputy president of the Ulster Farmers Union. “With an 11-2 vote in favour there are people to be won over in Europe.”

About 40% of the Provinces beef was exported before March 1996, Mr Taylor notes. Prices crashed from 230p/kg then to 160p/kg now. “Farmers are on a belt-tightening exercise. It has affected every town and village.”

However, there will be no sudden turn-around, mainly due to the strength of the Pound, he predicts.

David Rutlidge of Northern Irelands Livestock and Meat Commission agrees. “It is very positive news. But it is tinged with concern over the length of time it will take to regain markets.”

In currency terms, former major export destinations like France, Italy and Holland would have to pay 25-35% more now to buy same amount of Northern Irish beef as two years ago.

Although the 28% fall in the price of the Provinces beef cancels much of that out, the beef price has also fallen 5-10% abroad. Overall, that leaves Northern Irish beef at a 10-15% premium, Mr Rutlidge explains.

“Either we persuade customers to pay more, or we could see further tightening of returns.”

On a positive note, there will be more outlets for hard-to-shift products. Supermarkets abroad will take “superbly finished” cattle too heavy for UK markets or intervention, he adds. Forequarter meat, unpopular in the UK, could also be easier to shift.

Mr Taylor believes it will be mid-May before the first beef is exported. The main reason is that the dam of an export animal must survive for six months after that animal is born. But there was no facility for recording this on the Department of Agricultures database.

There is also the question of EU meat having to go through dedicated abattoirs and packing stations. “Owners will have a big decision to make. Will there be enough cattle to keep their plants full?”

That could be done by a sharing arrangement, says Richard Moore of Newtownards-based Milltown Meat. But he is adamant that beef will remain hard to export. “We still cant export whole cattle, bone-in beef or offal. If we cant export offal, the economics of running a factory are horrifyingly different to any other EC state.”