Irish feed and farming sector bearing the brunt of punitive EU levies on US beet and molasses
The US has traditionally been a major supplier of those materials to the Irish feed industry.
Trade body, the Irish Grain and Feed Association (IGFA), wants the Irish authorities to consider what flexibility they can apply to the interpretation of the EU regulation. “We also require assurances that industry will receive a full tariff rebate for product arriving in the November and December 2020 period.”
Otherwise, Irish feed companies and Irish farmers are facing higher prices, it said.
The Boeing–Airbus dispute between the EU and the US has been ongoing for 16 years. In November 2020, EU member states gave the green light to proceed with the publication of a list of products originating in the US that would be subject to duties, with that roster including beet pulp and molasses.
The IGFA said it does not question the trade policy direction of the EU on this matter. “Our principal concern is that the views of the Irish feed industry were not sought and there was a complete lack of discussion with us on the potential impacts of agreeing this regulation,” stressed the trade body.
It argues that industry could have found some workarounds if sufficient notice had been given to businesses in Ireland ahead of the imposition. No prior consultation period took place with the Irish feed industry.
“The EU provided member states ample opportunity to discuss, review the proposed list, consult with industry and provide comment. There was therefore a high level of transparency between the Commission and member states. However, despite the fact that Irish officials had access to all of this information, there was no consultation with Irish industry or discussion with IGFA or our members on the potential impacts of agreeing this regulation.
“In addition, due to the lack of notice, there has been little opportunity to limit costs. The time between publishing the legislation and implementation (November 7-10) permits the feed material importer no time to react and prepare.
“The costs on both commodities this month are estimated to be over €2m if 25% tariffs are to be applied. Despite the best efforts by trade to make alternative arrangements, some product must arrive and be unloaded. These unexpected additional costs will be picked up by the internal market and not fall on the US suppliers. Surely the objective is to retaliate against the US and not to add more pain to the EU internal market,” said the IGFA, in a briefing document.
Managing director of feed importer, ADM Arkady, Tony Markey told the Irish Farmers Journal that the Irish Department of Agriculture and the Irish Department of Trade should now request the EU Council to de-escalate the tensions, remove such import duties on US feeds and grain, and thus reduce the pressure on markets like Ireland.
Reliance on beet pulp and molasses imports from the US
Beet pulp pellets play an important role in ruminant diets in Ireland and, in line with the Irish Department of Agriculture’s nitrate reduction strategy, such raw materials help reduce the country’s need for high protein feed materials, according to the IGFA.
“They [beet pulp pellets] are a sustainable co-product from the food industry, which can be valorized by the livestock sector. The EU marketplace is already experiencing a significant tightening of digestible sources of feed materials.”
Such supply constraints are further compounded by the fact that the EU sugar beet crop is being impacted by the effects of drought and diseases, said the association.
“Overall, the supply of beet pulp is reduced by 6% in the EU and 14% in the rest of the world (ROW). If we look at the Ukraine and Russia, the two main suppliers from ROW, their supplies are reduced by 10% and 33% respectively. It follows, therefore, that the loss of US supplies from our feed balance sheet will be very challenging.”
Molasses are used in most feeds as a nutritional energy source, palatability enhancer and feed formulation binding ingredient.
Over 100,000 tons of molasses comes into the EU each year from Florida. In Ireland this is destined for the mineral feed supplement market – licks and blocks.
“Key components in Floridian cane molasses such as product viscosity, pH, low sugar invert sugars and palatability are crucial for producing mineral licks/blocks. Other origins of molasses can give rise to adverse chemical reactions in the process, resulting in soft product, shrinkage over time and, in some instances, expansion and overflowing product. Years of research has gone into understanding the chemical reaction in the feed lick/block manufacturing process and the origin of molasses plays a crucial part in the process. Therefore, it is not possible to change molasses origin without research/investment in the production process.”
