Almost all beef processing outlets in the country have only been operating at 80% capacity or less over the past few weeks as the Irish cattle supply becomes increasingly stretched.
In late-March and into April the beef kill dropped by roughly 6,000 head/week or just under 17% per week on last year, and all processors are naturally going to be anxious to ramp up their weekly kills.
However, there is nothing to suggest that the reduced supply trend will change for the remainder of quarter two (Q2) of this year.
With reduced supplies of beef forecast across Europe this year and assuming demand remains firm, the expected supply-demand scenario would suggest price increases are inevitable at some stage in Q2 of this year – but to what extent remains unclear.
While weekly kills are lower than last year, they are remaining relatively consistent in size, and price is following the same steady trend.
Factory agents are specialists in commentary on the possibility of a subdued beef trade but the reality is that beef supplies are down on last year while demand appears to be remaining firm.
While reducing the weekly kills may help to prolong cattle supplies, it presents the tricky issue for processers of reduced working hours for their highly skilled staff. Staff retention is always a key issue for processors as these skilled staff will all be needed when cattle supplies do increase later in the year.
Beef price
This time last year, heifers were being quoted at €4.90/kg on the grid at most sites and prices began to rise substantially until they peaked in early June at approximately €5.35/kg on the grid.
Today, heifers are being quoted at approximately €5.30/kg on the grid, just 5c/kg below last year’s peak quotes.
Input costs have increased substantially since last year and cattle finished this winter will have cost substantially more than cattle finished last winter (2021/22).
Nothing can be said with certainty when it comes to forecasting price in the beef trade, however reduced supplies and firm demand is always seen as a positive signal for price and the best advice for beef finishers is to keep cost of production as low as possible and move cattle on as they come fit.