Farm Ireland
Independent.ie

Friday 24 February 2017

Cattle price rise on cards

Booming live exports add up to a positive outlook for autumn

Ray Doyle

The indications for the beef and lamb trade for this autumn are broadly positive at this stage of the year and hopefully we will see a sustained rise in beef and lamb prices as the year progresses.

The old adage that you 'need a good live trade to keep the dead trade alive' will hopefully be borne out this year as the number of finished beef and lamb supplies available to the Irish factories this autumn will be lower, as a result of the increased live exports and factory disposals during the first six months of the year.

This will undoubtedly affect their operating costs, as any drop in cattle and sheep numbers results in lower profitability for the factories and this should provoke a price increase in order to get the necessary beef and lamb numbers.

Recent Bord Bia figures indicate that live exports are already up more than 50pc this year on 2009 and, if this continues, our total predicted live exports will probably exceed 420,000 animals in 2010. In addition, finished cattle numbers presented to Irish factories were 14pc ahead of 2009 by the end of May, which will lead to a much tighter cattle supply towards the end of 2010. This situation will inevitably create increased competition for all cattle types, but especially the better quality weanlings that are suitable for the higher priced markets, in Italy in particular.

The Italian market is very important for Ireland, for both the dead and live trades. This is because the Italian beef price is among the highest in Europe, and our meat factories supply the better meat cuts to this market directly. Also, Italy has the highest per capita consumption of meat in the EU at almost 24kg per person each year. Indeed, Italy has to import more than 1.4 million cattle additional to their own national output each year.

Ireland only provides 4pc of these imported animals, as the vast majority (over 65pc) come from France. However, while this number is small for the Italians (approximately 56,000) it has a significant effect on Irish weanling prices, especially the E and U grade animals. The high prices achieved for these animals in our marts tend to pull up the prices for the lower quality weanlings, thereby benefiting all cattle producers.

Finished

Regarding the UK, finished and store cattle are being exported live in significant numbers. Exports are up almost 50pc on 2009, further illustrating the tightening British supply base. Interestingly, the vast majority of exports to the UK are actually to Northern Ireland and not to Britain.

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Nationalisation issues prevent Irish cattle from attaining the prime prices on the multiple shelves, because cattle must be born, reared and slaughtered in England, Scotland or Wales in order to attain their quality assured status and premium price.

However, as over 50pc of the national kill in Britain still occurs in the smaller abattoirs, which service the catering and butcher trades where national origin is not an issue, Irish cattle have many advantages.

Our quality is world renowned but it is especially our geographical proximity to this market which should allow us to bridge the gap between British beef production and consumption.

I would hope that all these individual supply/demand factors will add up to a significant price rise for our cattle in the coming year.

Irish Independent



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