Farm Ireland
Independent.ie

Tuesday 6 December 2016

Beef sector faces double hit on prices

Surging supplies and Brexit factors pile on the pressure

Claire Mc Cormack and Darragh McCullough

Published 27/09/2016 | 02:30

Extra beef supplies are likely to put prices under pressure
Extra beef supplies are likely to put prices under pressure

Concerns are mounting in the beef sector as Brexit currency pressures and surging supplies of finished cattle threaten to pull prices.

  • Go To

Despite a huge shift to finishing animals at a younger age and lighter weights, Bord Bia estimates that there are an extra 31,000 head of cattle coming on stream this autumn.

Extra supplies are likely to put prices under pressure, especially when the impact of a weaker sterling is factored in.

The latest figures from the UK's Agriculture and Horticulture Development Board (AHDB) show that Irish beef exports slumped by 20pc in July as British processors there took advantage of cheaper local supplies.

"Prices have gone through the roof here since the Brexit vote," said the AHDB's beef and sheep analyst Debbie Butcher, referring to the 14pc increase in British beef prices since the June referendum. However, she believes that British consumers will never want to see Brazilian steaks replacing Irish product on their supermarket shelves.

"The British consumer still sees Irish beef as local and coming from a system that is familiar to them. It's effectively viewed as a British product," she said.

Currency changes

However, with a 15pc devaluation in sterling over the last three months, Ms Butcher said that getting Irish product into the British market was all about "competitive positioning" and lowering the price to reflect the currency changes.

Also Read


The currency pressures come at a time when the massive increase in calves from the expanding dairy herd is starting to filter through.

While older cattle aged from 24-36 months are down 44,000, those aged 12-24 months are up 140,000.

"There are more cattle out there and we're seeing that on a week-to-week basis, there's around 1,500 to 2,000 more in the kill, that will probably hold for the next little while because there is more cattle around," said Bord Bia's beef sector manager Mark Zieg.

"Live exports are down 25pc this year so there are more cattle staying in the country.

"Irish buyers are outbidding the export buyers so we have a lot of those cattle on the ground that are going to come through the kill," he said.

"Live exports are down 25pc this year so there is more cattle staying in the country. Irish buyers are outbidding the export buyers so we have a lot of those cattle on the ground that are going to come through the kill," he said.

However, he doesn't anticipate a huge flood of cattle by Christmas and he added that live exports to Turkey will relieve some pressure.

"That's probably a steadying influence, there's not going to be too many cattle around if we can get those 2,000 head off every couple of weeks," he said.

Mr Zieg believes opening up China, and other Asian markets, and the US market for manufacturing beef is needed. "We're definitely going to have more cattle in the system next year. It really depends on so many other factors and what is happening elsewhere in Europe," he said, noting that weanling exports to Italy have bounced by 17pc so far this year.

Indo Farming