As the clock ticks down to a UK exit of the EU, there is unfinished business with beef trade partners, leaving many questions unanswered.
Reading various news stories about the Brexit, as it is called, it is clear that someone will get the short end of the stick, no matter how well it is negotiated. There isn’t much more time for fine tuning since the deed must be done by March 29 unless all 28 EU members agree to an extension, although the date has become British law, so delaying it would break the law.
GlobalMeatNews reported that the Irish beef industry saw a catastrophe for their industry if the UK pulls out of the EU with no trade deal. (As it stands, Ireland would remain a part of the EU.) It could dramatically undermine Ireland’s beef exports, the story said.
Eddie Punch, general secretary of the Irish Cattle & Sheep Farmers’ Association told GlobalMeatNews, “Ireland exports 90% of its beef and half of all beef exports to the UK market. A no-deal Brexit would lead to WTO tariffs and probably a very negative movement in exchange rates, so that Irish beef exports to the UK would suddenly be economically unsustainable.”
He said in 2018, Irish beef production came to 633,000 tonnes and the value of the country’s beef exports was 2.5 billion euros.
Punch emphasized the lack of time to find new international markets at viable prices to replace Ireland’s UK market. He advocated some form of a short-term, emergency intervention buying package.
GlobalMeatNews added that the Irish Minister of Agriculture, Food and the Marine, Michael Creed told British media that he would seek hundreds of millions of euros in aid from the EU if an orderly withdrawal agreement were not approved.
BEEF MARKETS ADJUSTING
Beef prices already have been falling, the Irish Farmers’ Association said in the story. Prices currently were about 0.25 euro per kilogram below the same time last year.
“Minister Creed needs to put on the green jersey and tog out, right now, for Irish farmers who are facing a potential Armageddon from Brexit,” IFA president Joe Healy told GlobalMeatNews.
Besides price support, the Irish government should urge the EU that “for every 0.05 euro per kg change in the cattle price, the EU Commission makes provision for 20 euros per head compensation on every beef animal slaughtered,” Healy said.
Punch said the right long-term decision would mean a free-trade agreement, which would include a very substantial quota to re-enable Irish beef exports to be sent back to the UK.
“There seems to be a complete lack of awareness of the implications for trade and the impact of a default switch to WTO,” Punch told GlobalMeatNews. “We would hope that either the (Thresa) May package is agreed or that Article 50 (the cutoff time period for exiting the EU) is extended, so that immediate chaos is avoided.”
CATTLE, BEEF RECAP
Sixty-three head of fed cattle traded on the Fed Cattle Video Exchange Wednesday at $123 per cwt on a live basis.
Cash cattle traded last week at mostly $124 up to $125 per cwt on a live basis, up $1, and at $196 to $197 on a dressed basis, also up $1 from the previous week.
The USDA choice cutout Thursday was up $0.54 per cwt at $217.75, while select was up $0.10 at $212.14. The choice/select spread widened to $5.61 from $5.17 with 90 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Wednesday, was $142.24 per cwt, up $0.66. This compares with Thursday’s Jan settlement of $143.77, up $0.75.