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Bullish beef sector set for bumper year

There was good news on the double for beef farmers this week, with prices up €20 to €40/hd in the marts and the outlook for the year ahead remaining positive.

The cattle trade came back with a bang from the Christmas break, with exceptional prices paid for stock in the first sales of the new year.

George Candler of Kilkenny Mart described the trade last Thursday as "phenomenal", although he wondered if some of the buyers were suffering from "cabin fever" after the festive break.

Top quality cull cows made up to €2/kg. Store bullocks made up to €2.30/kg and heavy heifers up to €2.10-2.20/kg.

It was a similar story in Carnew Mart, Co Wicklow, according to David Quinn, with lively competition between farmers keeping a firm floor on the trade.

He said heavy bullocks were €40/hd dearer at €750 to €1,080 over the €1/kg, while prices for butchers' heifers were €50/hd up on the pre-Christmas trade. Heavy fleshed continental cows were making €900 to €1,100 with their weight.

Meanwhile, Bord Bia beef specialist Mark Zieg told a major industry meat seminar in Dublin last Friday that cattle numbers would remain tight for the first nine months of the year.

With between 50,000 and 80,000 fewer cattle in the system this year, Mr Zieg predicted that the weekly factory kill would fall by 1,200-1,400hd.

The seminar on meat market prospects for 2012, hosted by Bord Bia, heard that the fall-off in numbers would help the trade during the year.

But Mr Zieg warned that higher prices had hit beef consumption and would continue to do so. Resistance to price increases in Britain had resulted in a drop in beef sales in Britain and a switch to cheaper cuts, he said.

Joe Burke of Bord Bia maintained that the figures available from ICBF indicated that cattle numbers would recover by 100,000hd through the back end of this year and into 2013.

He also predicted a further increase in the popularity of bull beef production among farmers, which he said could match output levels from steer beef if growth trends continued.

Gerard Brickley, meat division manager with Bord Bia, claimed that sustainability had become a key plank for marketing Irish beef.

Bord Bia's sustainability programme would become a "prerequisite" for access to the premium retail markets which Irish beef and lamb processors supplied, in the same way that quality assurance was now demanded, Mr Brickley said.

He said Ireland had an international advantage in grass-based livestock production systems. The benefits of such systems were now being recognised in the US with the growth in demand for grass-fed beef.

Mr Brickley said Ireland had to broaden the scope of the sustainability project to encompass such issues as water usage and animal health and welfare. Taking it beyond the farm gate to processors and retailers would also be necessary, he added.

He said Bord Bia was increasing its focus on consumer research and had set up a consumer insight team.

He urged processors to "come and talk to us" if they had suitable projects.

In other beef sector news, a recent Rabobank report predicted that the already favourable conditions in the beef sector would continue throughout this year.

Rabobank predicted EU beef production would decline by about 93,000t (1.1pc) to just below 9m tonnes in 2012, which should help keep prices at a firm level, despite predictions of lower export demand.

However, the bank warned that market conditions were currently fragile and key factors such as high feed prices, the Irish and global economy, shifts in export markets and exchange rates could pose notable risks to the industry's margins at both the primary and processing levels.

Indo Farming