Market Justifies Beef Price Increase

IFA Livestock Chairman Brendan Golden said favourable and strengthening market conditions should be coming through in higher beef prices.

Brendan Golden said supplies of finished cattle are tight and factories are actively offering various deals to secure numbers while trying to hold back on base price increases.

“The current base prices for steers and heifers of €4.20/kg and €4.25/kg, respectively, are lagging behind market returns and must move on,” he said.

Demand for cull cows is steady, with the P grades still commanding €3.60/kg in some factories and better grading R and U grade cows making up to €4.00/kg

The kill to-date this year is 70,000 down on last year, which means there will be 40,000 fewer cattle available to factories between now and Christmas based on the Bord Bia supply predictions for the year.

UK beef production is currently 4% below last year’s levels, a trend that is forecast to continue for the remainder of the year.  This in turn increases demand for Irish beef in this key market over the coming months.

EU prices have risen by 10c/kg over the past two weeks.  When combined with the strong steady beef prices in the UK, this has now pushed the Prime Export Benchmark price 5c/kg above the prime Irish composite price to €4.16/kg, compared to the Irish price of €4.11/kg.

“These strengthening market conditions must be reflected in price increases from factories. With supplies not matching demand, farmers should sell hard to push prices on,” he said.

The IFA Livestock Chairman said exports to Northern Ireland have experienced a strong increase since the beginning of the year, reaching almost 60,000 head to-date. This is almost 30% higher than the same period in 2020 with this demand expected to continue for the rest of the year offering vital competition for forward store and finished cattle.

He said overall there were 218,360 cattle exported to date this year which represents only a small decline from the 222,456 cattle exported in the same period in 2020.

Brendan Golden said the positive market conditions created by the reduced volumes of South American beef imports in our key markets must be maximised and returned to farmers in higher beef prices.

He said Teagasc has clearly shown the target for beef prices must be €5.00/kg to cover the continuous increase in production costs.  Factories must stand firm with the large retailers to ensure beef prices keep pace with the production cost increases farmers have to endure.

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