The beef price differential between Ireland and the UK is a matter which often raises concerns among beef farmers at various times throughout the year.
Irish beef price generally trends below UK beef prices and rarely manages to surpass it.
At the Teagasc National Beef Conference in Ballinasloe, Co. Galway earlier this week, farmers were told that a price differential is important to ensure Irish beef remains in demand in the UK market.
At the event, GIRA’s Rupert Claxton presented a graph showing average beef prices in €/t carcass weight:
He said: “The red line at the top is the UK [price], the green line is Ireland and the blue is the EU average price. Ireland is pretty close to the EU average prices. The yellow part is the margin difference between the UK and Ireland.”
“Someone asked me earlier ‘is the UK going to back off, or is that market in the UK going to keep pulling beef?’
“If you look, we have about a €1,000/t difference in the margin now. In 2019, we were about €300-500/t in the difference.
“You need a margin there to create the import pull. If your prices are the same, they probably don’t need to buy the product from Ireland. That margin is what creates that pull; that’s what gives Irish beef the position in the UK market, and it has a very strong position.”
“With the European market, it’s more about carcass balance and having the right kind of product to fill gaps.
“The key of this is that the signal is positive, we are looking at a UK market that is short of beef and is looking for more, but cannot afford to play a limitless price. I think we will begin to see some correction as we go into the winter months, but the pull for Irish beef is still good.”
Claxton also explained the importance of profitability for all parts of the supply chain to ensure the future viability of the industry:
“As an industry, we have to be profitable at every level of the industry to be standing here in another 5-10 years, and the biggest issue for me today is farmer confidence.
“Cyclically, we have years where we make money and years when we loose money. Costs over the last 18 months have been eyewatering and make it more challenging.”