Farm Ireland

Thursday 27 October 2016

Bord Bia warning on beef prices

Impact of 120,000 additional calves set to kick in this summer

Published 13/01/2016 | 02:30

The second half of the year will see beef prices come under pressure.
The second half of the year will see beef prices come under pressure.

Beef prices are set to come under pressure in the second half of 2016.

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With almost 120,000 additional calves hitting the ground last year combined with a 60,000 drop in live exports, the first of this increase is set to hit the market this summer.

Bord Bia's Joe Burke estimates that there will be an extra 50,000-80,000 head brought to slaughter later this year. The increase will cancel the 83,000 drop in slaughter numbers in 2015 and would leave Irish beef prices vulnerable to cuts, even if sterling remains strong.

"Our reliance on the British market increased further this year to 54pc of total exports, largely due to the strength of sterling," said Mr Burke.

But he hinted that the British market might not be as strong as Irish farmers would like to believe, with farmgate prices slipping by 30p/kg (40c/kg) in Britain during 2015.

Sluggish EU markets, combined with an extra 500,000 cows on the continent following the removal of milk quotas, will reduce the options for Irish beef exports if the British market deteriorates.

Irish farmers will also be concerned that exports of Polish beef into Britain increased by 23pc last year.

This makes Poland the third biggest exporter into Britain after Ireland and the Netherlands, according to the AHDB. Beef output in Poland has increased by 14pc during the first nine months of 2015. Ireland's largest processor ABP owns two processing facilities capable of processing 100,000 head annually in Poland.

In response to the new figures, the ICSA expressed concern at the rapid rise of Polish business in the UK.

"Farmers would not like to think that Irish beef factories could see this as a source of cheap cattle to drive down the price for British or Irish farmers," said the ICSA's Edmond Phelan.

Instead, he called on suckler farmers to reduce cow numbers by at least 5pc, and for greater incentives to take farmland out of beef production.

"The time has come to look at the way in which supports are designed with a view to giving farmers real options. Forestry supports need to be made more attractive because the national strategy of expanding beef production is a disaster for farmers," he said. "It's time for a national debate."

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