The lowdown on beef
Bord Bia analyst Joe Burke looks at the key trends in the beef market
The beef market this year has improved markedly on last year, with average prices for R grade steers up 9pc or 33c/kg deadweight. This recovery reflects tighter Irish supplies which are 50,000 head lower, combined with stronger returns from the UK market. However, Continental European markets, which collectively account for almost half of Irish exports, have proven more challenging.
Following seasonal declines in recent weeks, Irish R3 steer prices are currently averaging €3.92/kg excluding VAT.
Meanwhile, the average R3 steer price in the UK is equivalent to €4.77/kg. In sterling terms, UK prices have been similar to previous years but the impact of currency movements has made the market more favourable for Irish beef with the Euro at 73p, compared to 79p last year.
Elsewhere around Europe, producer prices are generally below those prevailing in Ireland. For example, R-grade young bull prices are €3.74 in France, €3.81 in Germany, €3.80/kg in Italy and €3.61/kg in Spain.
Beef consumption in Europe has been sluggish over the past three years, declining by over 4pc. Consumer spending power continues to be weak across most markets, while poultry and pigmeat remain competitively priced. On the home market, retail sales volumes for beef fell by 4.5pc for the 12 week period up to mid-August. However, for the year-to-date the Irish market remains slightly ahead of 2014. In the UK, retail beef sales increased by 0.6pc in recent months, with most of this growth coming from steaks and roasting joints, along with a recovery in ready meals. Beef consumption in the German market also shows signs of improving. However, elsewhere around Europe beef sales are generally in decline. Recent sales of beef by French retailers were 4pc lower than last year's levels. Overall within Europe, a decline of 0.7pc in beef consumption is forecast in 2015, although some growth is expected again next year.
According to the latest forecasts, European beef production is expected to grow by 1.4pc this year. Much of this is due to recent expansion in the EU dairy herd with 300,000 additional cows in 2014. France, Spain, the Netherlands and Poland have experienced higher cattle supplies, while Ireland and the UK are among the only countries with lower volumes.