“It has been a challenging period with higher costs but thankfully it has also been a positive one in that the returns at farm level for cattle have been 20% higher than last year,” senior manager of Bord Bia’s meat and livestock team, Joe Burke, has said.
Speaking to Agriland on the official livestream for the National and World Ploughing Championships in Ratheniska, Co. Laois, today, Tuesday, September 20, Burke outlined that, on average, for the year to date, “cattle prices sit at about €4.90/kg excluding VAT”.
He noted that while the average beef price for this year does indicate “a strong performance, there also some challenges.
“At consumer level, consumers are experiencing the impact of inflation in terms of their own grocery spend so that is leading to some reduction in the amount of product being sold, particularly at retail level.
“The volume of beef that has been purchased in the UK retail market is down about 9% over the last 12 weeks up to mid-August and that coincides with an average price increase of 10% as well.
“While cattle prices are higher, there is that word of caution that consumers are feeling the pinch and it’s impacted their purchasing habits.”
He explained that higher beef production in Ireland to date this year has resulted in the overall volume and value of Irish beef exports increasing.
“The overall value of exports is up by 29% as a result of the higher prices and more production.
“Our beef exports into the UK are 36% higher in terms of value so our reliance on exports to the UK is even higher than it has been the last few years,” he explained.
“However, our exports into continental Europe are also up by a similar 30% in value terms and in particular, our exports into France (manufacturing meat, forequarter, product intended for mince is up by 50%.
“Other markets that have increased strongly are our key priority markets of Italy, the Netherlands and Germany. They have seen strong increases of between 20 and 30% each.
Cattle supply
Commenting on the supply of cattle this year, the Bord Bia meat and livestock team’s senior manager stated: “So far this year, we have seen about 100,000 extra cattle (including veal) slaughtered and there will probably be some additional cattle coming on stream between now and the year end.”
The Bord Bia senior manager indicated that factory cattle throughput will probably increase by a further 20-30,000 between now and year end.
“For next year, it’s likely we won’t see the same big surge and there may be a few less cattle around next year.
“We did see a strong kill of cull cows this year and there might [not] be just as many of those around next year, depending on what the input cost situation is.”
Burke attributed rising input costs as well as the prolonged dry spell this summer and resulting low grass growth as factors that partially influenced the number of cull cows coming on stream this year.
Commenting on cattle exports, Burke noted that there has been a recovery in the number of cattle being exported, particularly calves and said “that may mean we will have less prime cattle available for slaughter next year”.
“We will still have a high beef kill it wont be much below the 1.8 million that were likely to have this year.”
Mainland Europe beef supply
In an European context, Burke said that “with the very high production costs, it’s likely that European beef production will fall”.
He noted that while input costs have increased substantially for Irish beef farmers this year, the grass-based production model in Ireland means “costs aren’t under as much pressure” in Ireland as in other European countries.
“I know that farmers are feeling the pinch, they’ve seen theirs costs rise significantly but if you compare that with a beef producer in Italy or France who are reliant on feeding animals throughout the year indoors, were in a better position than them in terms of being more competitive and having lower production costs.”
Organic produce
Organic farming has been a hot conversation topic among farmers this year. Commenting on the organic beef sector, Burke explained: “There is a really strong interest in Irish organic beef” but noted that “the bottleneck has tended to be our production”.
“There are about 11,500 organic cattle slaughtered in Ireland per year and there is a market for more than that.”
Commenting on the key markets for organic Irish beef, Burke said: “A lot of that production is going to some of the same customers that are buying conventional Irish beef but the organic beef is sold as a premium product.
“It’s going into markets like Germany, the Netherlands and a small amount goes into the UK but definitely we would see strong scope to increase that.
“There are targets nationally for organic production to treble in the next few years and given the level of supports that are there and incentives, hopefully the sector can grow gradually.
“In the next few years we would hope to see more organic cattle produced and finished and that there will be a strong return and a strong premium for that product,” Burke concluded.