How will beef prices perform in 2021?
There is always the desire to know how beef price is going to perform throughout the year ahead so farmers can plan their slaughter dates and the re-purchasing of animals. However, due to market volatility, this is always a challenging task to undertake.
Speaking about the implications of Brexit on the Irish beef sector for 2021 during the Teagasc ‘Beef Edge’ podcast – Dr. Kevin Hanrahan, head of the rural economy and development programme at Teagasc, has predicted there will be a stable market for beef prices in the year ahead. He explained:
“The Covid-19 situation, the general economic recovery and the supply coming from European and British beef farms will impact on the price of beef.
We will be revising our Teagasc forecast shortly, but I don’t see anything on the horizon to cause a massive drop in beef prices.
“The extra trade costs as well as the UK implementing its old custom checks will ultimately have a negative impact on beef price – but I don’t see this bringing a very dramatic change.
“I would be looking at relative stability compared to the year we just had. Certainly, when you consider the chaos experienced during the first lockdown where prices collapsed and compensation was offered to farmers [in the form of the Beef Finishers Payment].
“The prices for cattle in 2020 were not that bad compared to 2019 – but this doesn’t mean that they were great for farm profits.”
Current Covid-19 restrictions
Speaking on the current Covid-19 restrictions effect on the beef trade, Kevin stated:
“It is a negative in terms of looking at what that means for regular food service demand for beef, but I would expect the retail channel will replicate the compensation of the loss [which was seen in previous lockdowns].
“The process of vaccinating people in Europe and Britain will mean that life can hopefully return to normal and that will be good for the demand for beef, farm incomes and prices.”
When discussing the impact which Brexit will have on the live export trade, Kevin expects the levels of trading between the north and south of Ireland to continue. He stated:
I don’t see major changes in exports of live cattle from the south to the north of Ireland. These cattle from the south can still be processed in the north and avoid tariffs when shipped to Great Britain.
“I don’t expect any politically created incentives to change how we manage the flow of animals on the island of Ireland, because beef products exported from both the south and north will avoid tariffs in the British market.
“The UK will still have preference for British beef, so there will be that price gap remaining in what British and Irish beef gets in that market.
“Due to a rise in costs, I suspect that there will be a reduced level of live exports from Ireland into Great Britain. Most of the live trade doesn’t go through the UK, it goes direct to the continent.
“I think this will continue, however, the extra traffic in the ports may cause a knock-on impact; but I don’t expect that it will be an enormous shock,” Kevin concluded.