‘Fragile export markets undermining benefits of a reduced beef kill’
The fragility of some export markets in the EU could undermine the tight supply situation in Ireland, according to the AHDB.
According to the AHDB, the weakness in some EU markets along with the strong Sterling may result in more processors looking towards the UK as an outlet for Irish beef as the year unfolds.
Irish beef production in September was down 7% on the year, it says, as a result of cattle slaughterings decreasing by 10% or over 15,000 head on the previous year.
According to the AHDB, the lower production has had a consequential knock-on effect on beef and veal exports in September, with volumes back almost 5% on 2014 levels, it says.
As a result trade to all of Ireland’s main export destinations in the EU was lower, including the UK while competition from Poland is still prevailing on some continental markets.
One of the significant factors in the beef trade in Ireland to the UK in recent months has been the impact of the favourable euro/Sterling exchange rate, reports the AHDB.
The weakening of the euro resulted in a price differential of as much as 70p/kg (99c/kg) between Irish and UK prices at the beginning of March.
With the pressure on the trade in the UK intensifying throughout the late spring this narrowed to be below 30p/kg (43c/kg) by early June, the low point of UK farmgate prices this year, it says.
In September, the price difference averaged 65p/kg (92c/kg), and in more recent weeks has grown to be 75p/kg (107c/kg).
It also said that this price difference will be a major factor in the trade over the coming weeks as beef processors look to fulfil specific supermarket requirements for the Christmas period.