Farm Ireland

Monday 18 December 2017

Beef prices catching up with Britain

Martin Ryan

A sharp fall in the differential between Irish and British factory prices has been reflected in a significant reduction in the live export of finished stock.

According to the latest Department of Agriculture figures, the number of heavy cattle going north of the border for slaughter has fallen by more than a third compared to the same period last year.

The difference between Irish and British cattle quotes has almost halved since late last year. Producers are now being paid up to 5c/kg more for some individual grades than comparable cattle in Britain.

In contrast, Irish prices trailed those in Britain by as much as 32c/kg at one point in 2010, according to official prices compiled by the Department and adjusted for currency changes.

Some cattle are now worth close to €20/hd more to slaughter in the South, than those exported to Northern Ireland or Britain.

In 2010, finishers selling plainer stock to the Irish plants were receiving up to €120/hd less than their British counterparts for a similar weight and grade of animal.

Last November, the Farming Independent reported that the differential in Irish and British prices could cost producers of O grade animals up to €30m per annum.

Official figures for 2010 show that Irish beef producers received 18c/kg less on average for R4 heifers than their British counterparts. In 2011, Irish producers have received 5c/kg more than the average British price -- this represents an improvement of €70/hd on a 300kg carcass.

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The difference in price for an O3 heifer has dropped from 18c/kg less than the average British price in 2010 to 1c/kg less so far this year. The U grade heifer price is now on par with that available in Britain, having previously trailed it by 12c/kg.

The price of U grade steers is currently 2c/kg higher than in Britain, while R3 steer prices now trail those available in Britain by 13c/kg compared to 24c/kg last year.

On the poorer grading steers the O4 price trails that available in Britain by 17c/kg compared to 32c/kg last year. The O3 price is now 12c/kg less than the British price compared to 27c/kg less in 2010.

Last year Meat Industry Ireland (MII) explained that the difference between Irish and British prices was due to the higher costs of doing business in Ireland and additional transport costs to the market place.

But the higher return from slaughter plants in the North resulted in a massive outflow of stock. For January-February 2010 an average of nearly 1,000 finished cattle per week were crossing into Northern Ireland for slaughter and some supplies were also going to Britain.

Average weekly export of finished cattle to Northern Ireland in 2011 has been less than 600hd, with very few crossing to Britain.

Steer prices in 2011 are up to 33c/kg higher than the 2010 average and heifer prices are up to 36c/kg higher.

However, producers claim that the improvement is not adequate to compensate for increased feed and fertiliser costs.

Indo Farming