Teagasc is anticipating a 3% increase in the annual average finished cattle price for 2024, when compared to this year.
Teagasc’s Outlook 2024 Economic Prospects for Agriculture, published today (Tuesday, November 28) details trends that can be expected next year in farm incomes, costs, and prices to farmers.
The report forecasts that the price for the average R3 steer will be around €535/100kg, including VAT, next year.
Teagasc
The report notes that Department of Agriculture, Food and the Marine (DAFM) cattle inventories show that supply of animals aged 12-24 months of age are significantly lower relative to the levels observed 12 months previously.
As a result, Teagasc is forecasting a 4% decrease in prime beef production in Ireland for 2024.
Overall EU beef production in 2024 is forecast to be approximately 1% lower in 2023. Currently, UK beef supply is expected to be unchanged next year.
Teagasc said that a drop in some input prices in 2024 will “impact positively on cattle finishing enterprises”.
It said an increase in demand from the purchase of younger cattle could emerge due to the expected contraction in beef production in the EU and the UK over the medium-term.
A slight improvement in margins on cattle finishing farms will also support this demande.
Teagasc forecasts that prices for weanling and store cattle will increase by 3% when compared to 2023 levels.
In 2024, the average gross margin per hectare on single suckling enterprises is forecast to increase by 8% to €719/ha.
On cattle finishing enterprises average gross margin is forecast to increase by 7% to approximately €779 per hectare.
Costs
The report notes that costs of production on single suckling farms are forecast to drop by 5% and by 9% on cattle finishing enterprises in 2024.
The level of expenditure on pasture and forage is expected to be lower in 2024 relative to 2023, mainly driven by an expected drop in fertiliser prices.
Concentrate feed prices are forecast to decrease by 1%, with some decreases in the quantity of concentrate feed usage on cattle finishing farms.
Teagasc anticipates that concentrate feed bills will be 5% lower next year on finishing farms and 2% in suckler enterprises.
The report forecasts that fuel prices will be 6% lower than in 2023, while the cost of labour is forecast to increase by 3% in 2024.
However, it is noted that on the average Irish cattle farms hired labour costs are very small and inflation in labour costs is not expected to have a major impact on overall costs of production.
Outlook
Teagasc said that the forecasted decline in domestic beef production may have some influence on beef prices in Ireland during 2024.
However, the main concerns will relate to beef supply and demand in key export destinations and beef markets globally.
“After a difficult second half to 2023, the prospects for the beef sector appear more positive entering 2024,” the report said.
Teagasc noted that there is a “continued challenge” for the Irish beef industry to develop new markets, which would reduce the dependence on the UK market which has “traditionally been Ireland’s second home market”.
46% of Irish beef exports were sent to the UK in 2023.
Teagasc said that due to the interdependence between the UK and the beef sector in Ireland, it anticipates some partial convergence in beef prices over the coming months.
In recent years, there has been a notable increase in the volume of exports to EU markets, including France. There is strong competition for access to these markets from Germany, the Netherlands and Belgium.
It also said that the ongoing lack of profitability for most suckler and finishing enterprises must also be addressed.