Tomei, who is a member of the 'Market Forecast Group at the European Commission', does not disguise the downturn in consumption and production of beef. 'A downward trend characterised by similar percentages in both areas of around -5-6%, with all segments in the supply chain under pressure,' says Tomei. 'Neither animal farmers nor slaughterhouses earn anything and only exploitation of offal saves the day; even processors and distributors are experiencing difficulties.'
Which cuts have seen the most significant setbacks in terms of sales?
'Livestock fattened in the Po Plains and white-meat veal. These two premium segments have been the hardest hit.'
How much beef does Italy import?
'We import about 400 thousand tonnes of meat per year. A few years ago, before the recession, Italy produced 1 million tonnes of beef and imported 400 thousand. Today, Italian production has fallen below one million tonnes but we are still importing the same amount. More specifically, imports of live animals have declined, with a consequent downturn in domestic production.'
How many slaughterhouses are there in Italy?
'Figures are rather mysterious. The Ministry of Health website lists are many structures - about 1,000 - but we are not sure if the list is up-to-date. The sector is very fragmented and many smaller set-ups are closing, as well as public or former public operations in great difficulty. What is happening was seen 15-20 years ago in Northern Europe.'
How many animals are slaughtered?
'About 750,000 calves a year.'
Have you studied the dimensions of the ideal or sustainable slaughterhouse?
'To be honest, no... Yet there is no doubt that many disproportionate investments have been made which were not covered afterwards. It takes little to fail these days since the banks have closed their doors. This means that operations that in normal times would have no problems surviving are struggling to survive.'
To what extent has the nitrates directive affected the crisis?
'It is a significant factor that, since we are the middle of a recession, is no longer in the forefront. Nevertheless, it is an aspect which has created difficulties for breeders through additional impact on costs in the supply chain.'
Do imports of livestock from abroad also affect the profitability of the sector in Italy?
'Very much so. We import about 1.1 million animals, 93% of which from France and other EU countries - this has a significant impact on profits in the sector.'
What action has Assocarni planned to counteract this situation?
'We have close contacts with the French supply chain: the aim is not so much to intervene on prices - which would be rather difficult - but to find an understanding with Italian entrepreneurs who enjoy, so to speak, gold status in the supply chain: in other words, reliable and regular buyers who pay punctually. We should try to avoid subjecting them to the price stresses that occur cyclically, when exports from France open up to Turkey or Algeria.
Is the proposal of developing the cow-calf line plausible?
'Of Course. We are currently working on a project for the new CAP that includes the development of the cow-calf line in an ecumenical key focusing on beef and white veal but, at the same time, we are seeking to stimulate the breeding in Italy itself. This is because today our livestock has become extremely impoverished. We evidently cannot totally replace French calves but we can improve matters by encouraging new births and not only milk or suckler cows.'
Is the project ready?
'We have already presented it to Minister Martina and all Regional Councillors for Agriculture because the game has to involve all the players. Thinking only in terms of the Ministry of Agriculture would be negative, we must also dialogue with the Regions. If we do not find support, we risk a rapid decline and the disappearance of the beef sector.'
Do you agree with the proposal made by Italy and now also endorsed by Minister Martina to support animal farming largely through CAP coupled aid?
'Yes. And I think it is very important that today we have a Minister for Agricultural Policies with qualifications in this sector from the province of Bergamo: he knows animal farming and its needs. We have asked the Minister to make courageous choices and to provide targeted rather than generalised aid.'
At what stage is the National Quality System?
The NQS is currently under consideration by the European Commission and we should receive answers in April. The process slowed down in recent months but now we have received input from the feed industry and rejected spurious content. As of May we should be able to begin NQS in effective terms and promote the brand with Ministry of Agriculture support.'
The Made in Veneto brand was launched recently. What do you think of regional brands?
'No problem but consumers are sometimes bombarded by too much information and end up being distracted.'
Where is meat sold?
'Normal trade is losing ground but compared to other EU countries the network of butchers in Italy is still alive and kicking. This is because butchers are evidently able to provide a service that people are still looking for. The proof lies in the fact that major retail chains have on-site butchers again offering advice to customers.'
How have meat trade routes changed in recent years?
'The main players in the beef segment are Australia, United States, Brazil, India and EU-28. In recent years, however, Australia has overtaken the United States in terms of production and, in general, the focus now is more on emerging markets. China is demanding meat and beef, albeit to a lesser extent than other products, can respond with high numbers.'
Are new markets opening up for the European Union and Italy?
'Without doubt. I'm thinking of Asian countries or Japan, a route already opened by EU but not yet by Italy. Even the United Arab Emirates is an interesting outlet, following the elimination of the Bse-related bans which were still in force.'
'Turkey is awkward. It is a growing country with a high-consuming middle class. Yet in the past they destabilised market by opening and then closing access, eliminating duties and then blocking borders as soon as its became convenient to do so. In 2011, Turkey opened to imports of meat and live animals but I think this was really a political operation. Turkey was worried that the Arab Spring would hit Istanbul on the crest of the wave of the food revolt. This is proven by the fact that meat imports were guaranteed by the Turkish Central Bank.'
Could the situation in Crimea and the expulsion of Russia from the G8 have an impact on the market?
'This cannot be excluded. Russia has already blocked meat imports from Ukraine on the grounds that Kiev is currently unable to ensure minimum health and hygiene standards. Yet it is not unlikely that any supporters of Ukraine will be banned with such public health excuses.'
Mad cow disease brought about compulsory labelling of beef. What advantages did this involve for the system?
'No benefits, only costs. The European Commission recently issued a decree on labelling for pork, poultry and sheep-goat meat with fewer restrictions than for beef. It is much less severe as regards the country of origin of livestock. This was done to avoid impact on the production costs borne by these sectors.'
Do you not think that knowing the 'life history' animals influences consumers?
'Not particularly. We have noticed that even if consumers read the name of the country, in reality this does not affect choice, which is really dictated by price. Today, consumer have no difficulty in buying Polish meat; perhaps 10 years ago, they would have had more doubts. It is therefore desirable that all meat, including beef, should involve the same procedures as regards labelling.'
You mentioned industry costs. What is the cost impact of labelling?
'The European Commission impact study suggests that writing 'EU/non-EU origin' would not involve any costs for the industry. The production country option affects the pig sector by 1.5% on final price, while the similar assumption for beef traceability has an impact of 2.3%. These are exorbitant costs, since they would also require changing all company software.'
What technologies will come to the fore in the future in the slaughtering and meat processing field and what new products?
'Major developments are unlikely in the slaughtering/butchering field. I believe that there will be interesting developments in terms of packaging, which extends product life. Edible packaging is currently being investigated in Europe.'
Is Assocarni in favour of or against GMOs?
'Absolutely favourable: we trust science and are opposed to the manipulated exploitation of the topic. We do not understand the ambivalent assessments of EFSA: we always trust it as a food safety authority but once GMOs are mentioned some of this trust evaporates. As regards growing GM crops in Italy, this is not a topic that we are particularly passionate about - it is a matter concerning farmers which I don't think the meat industry should comment on.'
Source: Eurocarne Outlook