Farm Ireland

Thursday 24 May 2018

Live prospects - how exports can boost cattle prices

As concerns rise about the dependence of the Irish beef sector on Britain, Louise Hogan looks at the potential of live exports to boost cattle prices

After a sharp fall off in exports, there is now a glimmer of light for producers
After a sharp fall off in exports, there is now a glimmer of light for producers
Louise Hogan

Louise Hogan

Long gone are the days when boatloads of cattle leaving the ports on the hoof were the main barometer of beef prices.

Yet in recent months there has been a stir ringside as live exporters have begun competing with farmers to buy up animals destined for farms, factories and feedlots in farflung destinations such as Turkey, Algeria and Libya.

It follows turbulent years on the live export front as numbers took a hit with prices for Irish cattle commanding a higher rate than the sums being paid across Europe.

"That meant we haven't been as price competitive for live exports as would previously have been the case," explains Bord Bia's beef analyst Joe Burke.

"We were paying 90pc of the European price in the '90s and '00s and that would have incentivised a lot of weanling exports to Italy and Spain. Now the price for Irish cattle compared with European cattle is running at 102pc," he says.

After a sharp fall off in exports, with numbers dropping from 178,000 in 2015 to 145,200 in 2016, there is now a glimmer of light for producers.

Shipments of cattle have been on the rise this year with live cattle exports up 38pc, with over 92,000 destined for countries including the Netherlands, Spain, Italy, Belgium, Northern Ireland and Turkey.

The figures are set to rise further with live exporters currently out on farms and at the ringside buying up animals to fill new contracts for Turkey, Algeria and Libya.

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For many it is the first time venturing into the markets in recent years, with unrest in Libya disrupting the buying power of consumers and leaving exporters at risk of not being paid.

With the beef sector constantly looking to shore up alternative markets through Ministerial trade missions and contacts on the ground, the livestock expert believes there is potential to grow the trade in the recently reopened markets.

The McCabe family's Supreme Livestock company is seeking cattle under 24 months for shipsments to Libya, while Quinn International Livestock has secured a contract to supply heavy stock to Algeria ahead of the Ramadam festival.

The Purcell Brothers' first shipment of cattle set sail for Turkey, while more are planned.

"The buying power is there on the part of some of those Libyan cattle dealers so the potential is there," explained Mr Burke. The shipment is also proving valuable as an extra outlet for heavier stock, with the Libyan market willing to take bulls up to 500kg.

Contact is continuing with key importers in the Algeria market, as Mr Burke explained there seems to be keen interest there to source Irish cattle and the demand is "strong".

"There is talk of Egypt and Lebanon which used to be a traditional market. There are some European cattle going to both of those already. Lebanon has been important for French cattle in recent years. It tends to take a lot of finished animals with demand around key Muslim festivals," he said.

"Egypt traditionally did a lot of importing as a result of government contracts. The Egyptian army would be one of the main ports of call in terms of cattle imports," he explained.

Young stores

"Demand is for finished animals going for slaughter and young store cattle," he said. Traditionally contracts were for dairy steers but recently they are opting to buy bulls.

It takes time to get the approval required for securing health certs for shipping to countries but another international market of note is Israel, explained Mr Burke. European countries have been sending dairy bred bulls and calves for veal production in Israel.

Export markets for calves are proving key with a significant increase of over 200,000 cows in the dairy herd since 2014.

"These higher calf births, from 2015 in particular, it will have a dramatic knock-on impact in the second half of this year," said Mr Burke, with the numbers of prime cattle, steers and heifers going for slaughter expected to increase by 100,000 in 2017.

However, as crosses off the dairy herd they will present as lighter carcasses with lower meat yield.

Off a low base the calf exports have surged 46pc this spring after being hampered by IBR restrictions in the key Belgian market in recent years.

Over 77,500 have been exported up to April 29, according to Bord Bia figures, with the full picture of the extent of the rise expected by the end of this month.

The most significant market for Irish calves remains the Netherlands, while Spain also takes big numbers. There were also some exports into the Belgium market which previously had taken 30,000 calves.

The IFA's Angus Woods was confident the live trade would remain active throughout the summer and autumn, with more contracts expected to be agreed for the Turkish market. He urged farmers to ensure they were paid on the day for cattle in all cases.

The ICSA's Patrick Kent met with the Turkish Ambassador last week and in their discussions, he emphasised the quality of Irish beef.

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