Beef trade steadies after two weeks of price uncertainty

The beef trade has shown some signs of steadying after an uncertain two weeks following the UK’s decision to leave the European Union.

Most factories have opted to maintain base steer and heifer quotes at last week’s level of 390c/kg for steers and 400c/kg for heifers.

Cow prices also remain similar to last week, as farmers are being offered 290c/kg for P grade cows and 300c/kg for O grades.

However, despite beef price remaining unchanged from last week, one procurement manager told Agriland that “the industry is seriously worried about the UK market.”

He said that fluctuations in the currency market, particularly the weaker Sterling, has hit beef processors pockets.

The weaker Sterling is after making it a disaster selling beef into the UK, it is hitting returns on Irish beef sold into Britain.

Another procurement manager added that the relatively high price of Irish beef compared to other EU markets is making it difficult to sell forequarter cuts to other EU countries.

He said that Irish cattle are currently the fourth dearest in Europe and this is making European buyers look to their own market for cheaper beef before buying Irish.

Cattle supplies

The number of cattle slaughtered at Department of Agriculture approved beef export plants are starting to creep up slowly.

During the week ending June 26, just over 31,500 beef cattle were slaughtered in Ireland, up 1,089 head or 3.6% compared to the week before.

This means that the Irish beef kill has been above 30,000 head for the past two weeks.

However, this follows a nine-week period when cattle numbers remained relatively tight, with the kill failing to pass 30,000 head.

The majority of the change occurred due to a rise in steer throughput, which jumped 16% during the week ending June 26.

Young bull and heifer throughput also increased by 109 head and 99 head respectively, figures from the Department show.

However, official figures also show that there has been a fall in cull cow and aged bull throughput, which declined by 19% and 5% respectively during the week ending June 26.

Week-on-week beef kill changes:
  • Young bull: +109 head (+2.4%)
  • Bull: -117 head (-19%)
  • Steer: +1,418 head (+16%)
  • Cow: -422 head (-5%)
  • Heifer: +99 head (+1.3%)
  • Total: +1089 head (+3.6%)

Main markets

According to Bord Bia, there was some positive movement in the British cattle trade last week on the back of tighter supplies.

In Euro terms, the British steer price is now equivalent to around €4.24/kg, while the latest Northern Irish R3 steer price equates to €4.20/kg (excluding VAT).

Since the results of the Brexit referendum, Bord Bia says there has been some increase in uncertainty and this has resulted in exchange rate volatility.

Last week, the euro/Sterling exchange rate fluctuated from 77p to 83p Sterling and the weaker Sterling has made UK exports more competitive in the Eurozone.

However, despite the price increase in Britain, the French beef market continues to remain unchanged Bord Bia reports, as difficulty still remains with getting imported product onto retail shelves.

Like France, Bord Bia also says there has been little change in the Italian beef market, but the prices paid to farmers have increased, with the R3 young bull price up by 6c/kg averaging €3.83/kg.