Weaker Sterling sees base beef quotes fall 5c/kg

A number of factories have moved to lower base beef quotes by 5c/kg on the back of a weaker Sterling.

Procurement managers have blamed the considerable weakening in Sterling as the main reason for falling Irish farmgate beef prices.

For the most part, cattle buyers are now offering 365c/kg for steers and 375c/kg for heifers and the vibes for next week are pointing towards further price cuts.

However, despite the fall in prime cattle prices, culls cows have remained largely unchanged from previous weeks, with most plants working off a 310-320c/kg price for R grade lots.

And, the plainer dairy type stock also remain on par with previous weeks, with O and P grade lots trading from 290c/kg and 280c/kg respectively.

Irish cattle trade under pressure since Brexit

The Irish cattle trade has been under some pressure since the UK decided to vote in favour of exiting the European Union.

And as a result currency markets, particularly the euro/Sterling market, have seen major fluctuations in recent weeks.

At present, the euro/Sterling exchange rate is trading at 0.90p/euro and this is having a negative impact on Irish beef being sold into Ireland’s largest export market – the UK.

Along with a weaker Sterling, a number of cattle buyers have blamed ‘higher than usual’ cattle kills for the fall in beef cattle prices and they expect supplies to remain strong in the coming weeks.

Cattle supplies reach 36,000 head

The number of cattle slaughtered in Department of Agriculture approved beef export plants continues to climb on a weekly basis.

The most recent figures from the Department for the week ending October 9 show that the weekly kill broke the 36,000 head mark, just over 6,001 head more than the weekly factory supply and demand level.

A jump in cull cow slaughterings made up the majority of this increase, with the weekly kill of cows up by 436 head or 5.7% on the week earlier.

Official figures also show that young bull, bull and heifer slaughterings all posted increases on the week before, up by 275 head (+12.6%), 10 head (+1.8%) and 137 head (+1.7%) respectively.

However, despite the upward movement in kill numbers, the number of steers slaughtered in Ireland during the week ending October 9 was 295 head (-1.7%) lower than the week before.

In total, this means that the beef kill for the week was 1.7% higher than the week before.

Week-on-week beef kill changes:
  • Young bull: +275 head (+12.6%)
  • Bull: +10 head (+1.8%)
  • Steer: -295 head (-1.7%)
  • Cow: +436 head (+5.7%)
  • Heifer: +137 head (+1.7%)
  • Total: +590 head (+1.7%)

Main markets for Irish beef

According to Bord Bia, the British cattle trade has eased following months of upward movement with the weaker Sterling affecting confidence in the market.

Overall demand has slowed, it says, but it is expected to increase on the back of seasonal demand in the coming weeks.

Prices from the AHDB (the English organisation for beef and lamb) show that R4L steers made the equivalent of 406c/kg for the week ending October 8.

Bord Bia also reports that there has been little change in the market across the Continent, while beef production in South America has been mixed.

It says that Argentinian beef supplies have dropped by 6% during the first nine months of 2016, while beef exports in Uruguay have increased 8% year-on-year.