The outlook for beef prices this autumn is broadly positive as a combination of tight supplies in Ireland and Britain should underpin strong returns for producers.
Bord Bia predicts a fall of 125,000-140,000hd of finished cattle this autumn, which should translate into factories having to compete more aggressively and pay more to secure supplies. The reason for the drop is a combination of several factors. The large number of calves exported live in 2009 and last year, and the increased numbers of quality weanlings shipped to Italy and Spain over the past two years, have certainly impacted on supplies.
And though the recent decline in the suckler herd has been halted, we will not see this being reflected in bigger numbers for another 12-18 months. Indeed, the drop in the suckler numbers since 2008 will translate into tighter cattle supplies in 2012.
There currently is an EU deficit of more than 300,000t of beef, which has to be imported from third countries. However, the price of Brazilian beef, which is the EU's largest supplier of imported beef, is on par with the European prices.
The market would suggest that prices will hold at current levels or strengthen further.
EU beef supplies are predicted to fall by 1.5pc next year, with the larger member states of France (-4pc) and Germany (-2pc) showing the biggest drops in supply.
Tighter supplies of finished cattle, in Britain in particular, could result in a 6pc fall-off in overall production.
Live exports of our E and U-grade suckler weanlings continues to underpin the weanling sales but, although the higher home prices have significantly decreased, the number of animals leaving Ireland this year is down almost 40pc on last year. The Italian market is important to the suckler farmer in particular, as the big prices for the top-quality cattle filters down to the lower-quality animals.
However, another positive from this year is that more Irish finishers are willing to pay higher prices for the better-quality cattle, as they seek to take advantage of the improved quotes on offer from the factories.