Beef sector faces double hit on prices
Surging supplies and Brexit factors pile on the pressure
Published 27/09/2016 | 02:30
Concerns are mounting in the beef sector as Brexit currency pressures and surging supplies of finished cattle threaten to pull prices.
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.
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.