The Courier & Advertiser (Angus and Dundee)
Global meat industry seems as confused about the implications of Britain leaving as everyone else
It would appear that our global competitors are as confused about Brexit, and how it’s all going to turn out, as we are.
As a result, meat sector leaders in Brazil, the US and Canada are more focused on increasing exports to Asia than on targeting an immediate sales growth in post-brexit Britain.
The less positive news for UK producers is that these three countries are already strongly placed to build beef, lamb and pork sales in the same international markets that Britain will be targeting after March next year. They also have plentiful supplies, with beef production in the US set to hit a new record this year, while Brazilian beef exports, which are already 12% ahead of 2017, set for further growth next year.
Liege Vergili Nogueira, executive director of ABIEC, the Brazilian Beef Exporters Association, said she expected exports into Europe to remain more or less as they have been, including product heading into the UK.
She added: “We will need to discuss the new relationship that emerges (after Brexit) alongside any new tariffs, of course. After that, we will see what happens.”
In fact, despite exporting 84,837 tonnes of beef to the EU so far this year, of which 20,945 tonnes ended up in the UK, Brazil’s export attention is much more focused on consumers in China.
“We’ve exported 12% more beef this year than in the same period in 2017, with our growth in sales mainly concentrated in China,” said Ms Nogueira. “It’s an exciting market for us and we’re definitely expecting to achieve further sales increases to the country next year.”
Having only entered the Chinese market three years ago, Brazil’s sales progress is clearly remarkable, lifting the country’s beef export total to 1.2 million tonnes this year, from a national output of about 10m tonnes.
While the UK is second only to Italy on Brazil’s listing of EU beef exports, British sales account for just 2% of Brazilian beef exports globally. This contrasts with 24% of international sales going to Hong Kong and 19% to China, figures which explain why ABIEC’S is keeping the EU, UK and Brexit in perspective at present.
Similarly in the US, where beef output is running close to 4% ahead of 2017, and set for a new record, the appeal of growing exports in Europe is tempered by the more obvious attractions of several other “exciting export markets”.
That was how US Meat Export Federation president Dan Halstrom described emerging market opportunities in Korea, Japan, Mexico and Canada, plus Hong Kong/china, although he agreed that China was currently a somewhat “volatile” market for the US.
“In terms of Europe, we sell around 16,000 tonnes of US beef into the EU, including the UK,” said Mr Halstrom.
“It’s not a massive trade but it is very high value and therefore very important. In addition, subject to resolving certain trade issues, we see a lot of potential to grow business in Europe. We were on 18,000 tonnes a few years ago and could easily supply 25,000-30,000 tonnes to the EU if the terms were right.”
Asked what he thought about a potential UK/US free trade agreement (FTA), particularly whether or not it would carry any benefit for UK producers, he said: “Typically, we’re interested in FTAS which are fair for both sides and I would be optimistic that there would be aspects of it that would be very advantageous for UK production and trade.
“I can definitely tell you that the US side is very interested in expediting trade deals and that, judging by the recent NAFTA settlement, these things don’t need to take several years to negotiate.”
In reality, of course, FTAS don’t always deliver, at least not immediately. That certainly appears to be the case for the Eu/canada deal which finally came into force just over 12 months ago, after more than eight years talking.
“Although we’ve achieved some improvements in market access, the truth is that in commercial terms not a whole lot is going on right now,” said Martin Lavoie, president of Canada Pork International.
“Actually, both prices and options in other markets are better for us than we currently have in the EU. As a result, we’re more focused on Asia at present because we have better options there than exist for us in Europe.
“In relation to the UK market, we’re obviously following the Brexit negotiations and recognise that we might need to have our own agreement with Britain in due course.
“For now though, our main exports market for Canadian pork are China, Japan, Korea and Mexico, plus the US, of course, with the Philippines and Taiwan being next in line for attention, not the EU or UK.”