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Beef Prices Strong, But Input Cost Surge Hits Margins

IFA Livestock Chairman Brendan Golden said demand for beef in our key export markets is extremely strong.

“Cattle supplies in the UK since the start of the year are running 10% below last year’s levels, providing a real opportunity for factories to increase prices to farmers,” he said.

The Prime Export Benchmark Price has surged over the past few weeks and is now 4c/kg above our price, indicating the strength of demand for beef in both the UK and EU markets.

Beef prices have risen again this week, with steers now starting at a base price of €4.40/kg in most factories and heifers starting at €4.45/kg.  Factories are paying 5c to 10c/kg above quotes to secure cattle. This is pushing prices to €4.50/kg and €4.55/kg respectively.

Demand for cull cows is strong, based on the demand for manufacturing beef, with cull cows starting at €3.70/kg for P grades and pushing to €4.20/kg for good quality R/U grades, O grading cows in general are ranging from €€3.80/kg to €4.00/kg. R/U grading young bulls are making from €4.30/kg to €4.45/kg.

All in, prices for some cattle have brought €5/kg very much into play and this must be the target.

“While cattle prices are stronger than last year, the reality is production cost increases have eroded all of these gains.  Based on Teagasc estimates, on some beef farms, fertiliser and feed costs alone are increasing production costs by 65c/kg,” he said.

Brendan Golden said beef farmers are not in a position to absorb these cost increases.  Factories must return the full value of the strengthening beef market to farmers in price increases.

He said farmers should sell hard.  Supplies are tight in our key markets, demand for beef is strong and factory agents are very active on the ground in trying to source cattle.

Brendan Golden said this demand is feeding into mart sales, with prices for finished and forward store cattle and cows very competitive compared to prices offered by some factories.

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