The Teagasc Annual Review and Outlook for 2023 has outlined that “a further round of meat price inflation is highly probable” in the beef sector for 2023.
This year (2022) has been a highly volatile year for beef price. Farmers witnessed beef prices soar in May and June to record levels, and then decline until late-November when beef price started to increase again.
According to Teagasc, the prospects for young cattle prices will “partly depend on the profitability and expectations of cattle-finishing enterprises”.
The Teagasc forecast for 2023 is for a 4% increase in Irish finished cattle prices and a 5% increase in young cattle prices (weanlings) in 2023.
The levels of profit forecast for both cattle enterprises in 2023 are similar to the averages observed over the period 2015-2021.
The profitability of the average single suckling and cattle finishing enterprise, when decoupled direct payments are excluded, has for most of the recent
past been negative, according to Teagasc.
However, Teagasc did outline that while the top one-third of single suckling and cattle finishing enterprise often earn positive net margins, most enterprises are persistently failing to cover their costs of production with the value of output sold.
This on-going lack of profitability reflects the structure of the industry and its high costs, the report outlined.
Meat price inflation
According to the Teagasc outlook, prospects for the Irish beef industry in 2023 “will partly depend on the evolution of input prices”.
While a further round of meat price inflation does appear highly probable, the report noted that the outlook for the longer term “is more uncertain”.
The outlook warned of downside risks coming from a number of factors including the potential “potential influence from declining milk prices“.
“Looking ahead to 2023, there are downside risks associated with weak macroeconomic growth, a potential influence from declining milk prices and the potential for further input price inflation.”
The report concluded that “moderate changes” in the profitability of beef production in Ireland will be seen in 2023.