The beef market outlook for 2023 remains broadly optimistic but this optimism is “surrounded by a fair degree of uncertainty”.
That’s according to Bord Bia’s Beef Sector manager Mark Zieg.
Giving his analysis of how beef markets are looking for 2023, Zieg told Agriland: “The European Commission forecasts that the EU beef herd will decline further” in 2023.
He outlined that a 0.8% decline has been forecast in the EU beef herd for next year and said “notable declines” in the number of finished beef cattle are forecast in many of Ireland’s key markets.
Some of the key markets for Irish beef which a decline in supply has been forecast for 2023 are:
- France: 2% decline;
- Spain: 2.3% decline;
- Italy: 1.4% decline;
- The Netherlands: 0.8%.
As a result of these declines, the Bord Bia beef sector manager believes “supplies of beef will be relatively tight and should underlay a positive market environment for Irish exports”.
The UK beef market
Zieg said that the UK “expects to see a small increase in beef supplies across 2023″.
“However, the cost-of-living crisis and weakening economic situation is expected to continue to impact on beef demand in the UK, while the European Commission also forecasts a 1.5% decline in consumption.
“Irish beef exports to these markets will be determined by the ability to represent a value proposition that can stimulate demand for Irish beef, against lower-priced proteins and imports from third-country suppliers,” he added.
Cattle price outlook
Bord Bia’s market outlooks for Irish beef appear relatively positive in 2023, and Teagasc’s outlook for finished and young cattle prices reflect this forecasted trend.
Teagasc has said the average Irish finished cattle prices in 2023 are forecast to be 4% higher relative to 2022.
The average Irish young cattle prices in 2023 are forecast to be 5% higher in 2023 relative to 2022, according to Teagasc.
While cattle prices are forecast to be higher, these prices will not necessarily reflect higher gross margins on beef farms in 2023.
Direct costs of production on cattle finishing farms are forecast to increase by 5% in 2023 and the average gross margin per hectare is forecast to remain unchanged at €626/ha.
On suckler farms, the cost of production is forecast to go up by 3% in 2023 and the average gross margin is forecast to increase by 11% to €520/ha in 2023.
The introduction of the Suckler Carbon Efficiency Programme, the Agri-Climate Rural Environment Scheme (ACRES) scheme and other policy supports can contribute to increases in farm income on cattle farms in 2022, according to Teagasc.