The reduced supply of cattle in recent weeks has been hindering processor attempts to reduce prices paid to farmers in the beef trade.
Irish beef price has now surpassed the overall average British beef price.
According to the Livestock and Meat Commission (LMC), in the week ending Saturday, August 8, the average British ‘R3’ heifer price was £6.48/kg, 13p/kg below the average Irish price of £6.61/kg.
Cattle prices have lifted by 40c/kg and more in cases in the past five weeks after declining from record highs in early April of this year.
Beef supplies
Beef industry personnel have told Agriland the current price lifts being seen are being driven by reduced supply rather than increased market returns, which is generally an indicator that price lifts will be short-lived.
However, with cattle supplies expected to be below last year’s levels for the remainder of the year and some factories now only operating on a three-day-week kill, supplies could well remain tight into the year-end at least.
UK market forecasts suggest British beef supplies to decline in the second half of this year also – potentially further increasing UK import demand for beef.
Often at this time of the year, Irish factories reduce their level of activity at marts and it is not uncommon for beef prices to drop off at this time of year ahead of winter-beef finishers traditionally moving out to buy cattle for their systems.
Enforcing rules
There has also been talk in recent days of some factory outlets, that are not already doing so, enforcing a rule that all cattle purchased in a mart must remain in a herd for a minimum number of days prior to slaughter.
While several beef markets already require this, it remains to be seen if this will be enforced across the board and what impact – if any – it will have on the mart trade for heavy cattle.
Export demand and farmers replacing cattle will likely keep a firm floor on the trade for store and lighter-type cattle and beef farmers will have plenty of buying power this autumn after the strong uplift in the beef trade this year.
The rhetoric from factory procurement managers is that beef prices have to come back to levels similar to before the most recent lift (past five weeks).
However, the heated competition between processors to secure the limited supply of slaughter-fit Irish beef cattle could well continue to thwart this into the end of the grazing season at least – assuming Irish beef remains in demand at the price in its key markets and cheaper beef imports from the southern hemisphere do not gain a stronger foothold in these markets.
