Mr. Eddie Punch:

There are also many known unknowns in this area. We can calculate what the value of tariffs will be. In reality, however, a negotiation must happen between processors and purchasers of beef in the UK. There will also be impacts in respect of the currency exchange rate movements. Much damage was done to the beef sector in the past four years, because as soon as the Brexit vote went through the value of sterling dropped significantly and it has never recovered. We hope that that aspect has been built into the price, but if the ongoing talks end badly, there could be further weakening of sterling and could add more damage to the saleability of our beef in the UK than just tariffs. We must also consider the impact of economic negativity, combined with potentially dearer beef for UK consumers. That is assuming there would be a hit to UK consumers and that would impact on the overall consumption of Irish beef in the UK market.

It is hard, therefore, for anybody to forecast the exact outcome. It is clear, though, that this is not just a matter of tariffs. It also involves potential exchange rate movements, impacts on consumption in the UK and logistics costs, whether in respect of delays at ports or additional customs clearance bureaucracy. All of that adds to costs. One thing we are concerned about even if a deal is got across the line, which we still hope will happen, is that it is now looking like it is late in the day to have this situation sorted out for January. We might, therefore, have a temporary period of chaos until the deal kicks in. That may imply trading on WTO terms at the start of the new year, but we do not know yet. There is also a problem in respect of the European Parliament having to ratify a deal. Therefore, there is a great deal of potential for uncertainty.

We think significant efforts have been made to get product across to the UK before the end of the year. That has perhaps helped the trade for beef in marts, and we have seen a great deal of purchasing of beef cattle from Northern Ireland, in particular. There is a slight concern, however, that that development will have an impact on the price of beef early in the new year. I refer to the stocking up of products in the UK in anticipation of disruption early in the new year. All those things point to many difficulties for farmers early in 2021. The other side of that equation, though, is that some farmers I know of have slowed down finishing cattle because they do not want to have too many cattle for beef markets in January. That is leading to a problem with the BEAM scheme as well, because we are going that bit slower with finishing cattle. We had a meeting with officials from the Department yesterday regarding the BEAM scheme 5% reduction, which we see as being increasingly problematic in the context of everything going on with Covid and Brexit.