AgriLand has teamed up Bord Bia to bring you a complete market analysis – across all sectors – from Bord Bia experts in our key export markets across Europe and indeed worldwide.
Over the coming weeks and months, we will provide both written and video content with the most up-to-date information in relation to prices and demand for Irish products.
In the following article/video, we hear from Joe Burke, Bord Bia meat and livestock sector manager, on how Irish beef and sheepmeat is performing in key export markets. We also look at current live export figures and how they compare to 2019 levels.
Starting with beef, markets have witnessed little change over the last week. In the UK, Kantar reports that in the 12 weeks to April 19, 2020, total retail beef sales volumes actually increased by 15% year-on-year, with the increase coming through all categories of fresh beef.
Mince accounted for the largest increase at 27% growth, with burgers increasing by 24% and steaks by 11%.
However, these figures reflect a large degree of panic buying and stocking-up in the initial weeks of the Covid-19 pandemic, as well as the shift in consumption from foodservice to in-home eating only.
“We recently looked at the macro economics situation internally and the GDP of the key global markets looks set to decline considerably – overall by 3% for the year,” Joe explains.
If we look particularly over the coming months at the net impact that is likely to have, we’re looking at a decline of approximately one third in foodservice sales.
Due to the pandemic, beef consumption across Europe is forecast to decline by 7-8% this year, he said.
Retailers in many markets across Europe are focusing strongly on supporting the domestic beef sector.
This is providing a particular challenge for Irish beef exports, due to our high (90%) dependence on exports and acting as a supplementary supplier across a wide range of European destinations.
Additionally, commenting on the overall beef market impact of Covid-19, GIRA also recently predicted an economic lag leading to a widespread downturn in consumer spending over at least the next two years.
However, while there is a considerable slow down across Europe, there are some ‘green shoots’ appearing in the Asian market.
“Based on the figures and projections that we are looking at, the market in Asia is effectively recovering and there is more important demand.
Irish exporters are receiving calls from their Chinese customers and more trade is taking place.
Cattle supplies and prices
Cattle supplies at Irish export meat plants totaled 25,964 head during the week ending May 2, 2020, which represented a decline of 5,596 animals on the equivalent week last year.
A total of 613,730 cattle have been processed up to the week ending May 2. This figure represents a decline of 22,141 head on the corresponding period in 2019.
Across Ireland, average prices paid for prime cattle during the week ending May 2 were €3.43/kg for R3 steers, and €3.47/kg for R3 heifers. These prices exclude VAT, but include all bonuses such as breed-based producer group bonuses.
In the UK, the Agriculture and Horticulture Development Board (AHDB) reported prices equivalent to €3.76/kg for R3 steers for the week ending May 2, while R3 heifer prices stood at the equivalent of €3.74/kg.
The EU average R3 prime male – mainly young bulls – declined again last week to €3.41/kg (down from €3.44/kg), putting the Irish R3 steer price slightly ahead at €3.43/kg for the week ending May 2.
In addition, EU average R3 heifer prices were €3.49/kg for the same week.
Sheepmeat
Commenting on the sheep sector, Joe said: “Thankfully, the lamb market has been much more positive. For the year-to-date, sheep meat prices in Ireland have risen by 6%.”
However, while there was some positivity witnessed with sheepmeat prices in recent weeks, lamb prices have come under downward pressure over the last week due to a marked slowdown in demand – both in the domestic and export markets.
This was largely due to seven successive weeks where retail demand rallied upwards thanks to the consumer frenzy of stockpiling in the early days of the crisis.
This was followed by a brisk Easter trade and the commencement of Ramadan in late April. The timing of these events also coincided with the seasonal low supplies of hoggets both in Ireland and the UK. New season spring lambs are beginning to materialise.
“In the last few weeks, we have seen a few additional spring lambs coming on stream. It’s only in the last three-to-four weeks that we have witnessed thriving conditions for sheep,” Joe said.
However, it will be late May or early June before supplies reach a seasonal peak. It remains to be seen the extent to which Ramadan will provide a boost to the trade up to the end of May.
With restrictions in place for mass gatherings, the traditional celebrations around the ending of the Muslim fast will be curtailed. Lower oil prices will also have an inevitable impact on global sheep meat demand and live exports, particularly from the oil rich states in the Middle East.
On a positive note, some green shoots are emerging as restrictions are gradually easing on the continent.
However, it will take some time for this to translate into increased demand for sheepmeat from the foodservice sector, as consumer confidence and disposable incomes remain impacted. In China, prices for mutton flaps and forequarter meat are reportedly improving, as foodservice outlets return.
For the week commencing May 5, hoggets are generally trading at €5.50/kg, plus a 10c/kg QA bonus, whilst new season spring lambs are quoting €6.10/kg plus the bonus.
Live exports
Weekly exports had recently been approaching 15,000 calves. However, there was a significant slowdown in shipments for the past number of weeks.
For the week ending April 25, there were 5,500 calves exported for the week, including approximately 1,800 to Italy and 3,200 to Spain.
Other calf markets included Northern Ireland. Calf exports to the Netherlands have been severely disrupted due to Covid-19. All markets are reporting reduced demand for calves, as the trade for finished animals for beef and veal has also deteriorated.
So far in 2020, a total of 132,656 cattle were sent for live export. This represents a 19% decline in exports compared to the same period in 2019.
For the year-to-date (to week-ending May 1), calf registrations to the dairy herd are running almost 50,000 head or 4% ahead of 2019 levels, at 1.23 million head.
Approximately 30,000 of this increase relates to additional beef-cross calves, from dairy cows and heifers mated with Aberdeen Angus and Hereford sires.
Interestingly, calf registrations to the suckler herd for the year-to-date have also increased by more than 15,000, which represents a 5% recovery following the reductions we had seen in recent years.
Irish exporters also continue to focus on international markets for older cattle, with a consignment of 2,900 young bulls recently shipped to Turkey, along with a consignment of finished cattle recently exported to Algeria.
More boatloads are scheduled for Algeria, while exports to Libya have also also taken place this year.
Bord Bia market activity
Since the announcement of ‘lockdown’ in a number of the key markets across Europe, Bord Bia adjusted the way in which it promotes Irish products.
“We looked at our different activities and a lot of those have been refocused in terms of online promotional activity. Each year, we promote Irish beef with 70-80 different customers across Europe. We are now focusing on the steak cuts and we’re having some success.
“For example, here on the home market, there was a TV advertising campaign for steaks and that has promoted good sales of these cuts here in Ireland. It’s very important to follow that up with promotional activity – again for steak cuts – in the key export markets.
Joe also outlined that the sales of Irish beef in Italy have been quite strong in recent weeks.
“In other markets, we have been working with retailers in order to develop their proposition through advertising in their in-store magazines and through online activity. In some markets, we looked at developing a format for promotion in conjunction with members of our Chefs’ Irish Beef Club,” he concluded.