Now might be the time to take a punt on plainer stores as demand lifts
Beef prices across the world are shooting up. But will Irish farmers get the benefit? Compared to 12 months ago, Bord Bia has reported global price increases.
The price hikes have taken hold in all the main beef exporting nations. The list below tells its own story:
- Up 12.5pc in the US from 224c/kg to 252c/kg;
- Up 13pc in Uruguay from 155c/kg to 175c/kg;
- Up 26pc in Brazil from 167c/kg to 210c/kg;
- Up 53pc in Argentina from 133c/kg to 204c/kg.
These are the prices for slaughter cattle. But the slaughter cattle price impact in these countries has fed back along the production chain to feeder and store cattle as well.
All of these beef prices are still well below the levels that Irish farmers need, and aspire to, for top quality beef. Yet, for the coming months, the pressure on price will be upwards. The biggest constraint on any EU beef price rise is still the general recession and the power of the multiples.
However, in times of an absolute scarcity, it is at the lower end that the greatest effect on price is seen. When beef prices are rising, the cow price is first to jump. All sheepmeat prices rose this spring, but it was the cull ewe that caught the biggest relative lift.
On this basis I'd argue the world rise in beef prices is most likely to benefit the demand for the plainer cattle and the cow beef in Ireland. Historically, Ireland shipped plainer cattle to North Africa and the Middle East. In the recent past, these regions have bought their cattle from South America. Ireland was excluded partly because of BSE, but thankfully that ban has been lifted. But with the jump in South American prices, cattle in Ireland and the EU can now compete across North Africa, even in the absence of export refunds. Indeed, France shipped about 40,000 live cattle to North Africa last year -- mostly to Algeria.
In the past, Ireland shipped cattle to Egypt, Libya, Lebanon, Tunisia, Algeria and Morocco. Most of the cattle that travelled were Friesians and Holsteins.
Very strong enquiries are again coming from these customers. What we now need is sensible and fair veterinary inspection of the boats in which the cattle can be shipped. I understand that enquiries to approve some boats are being submitted to the Department of Agriculture.