British beef prices have tumbled to Irish levels. Five months after a record price differential of €1.20/kg between Irish and UK R3 steers, the gap had closed to 15c/kg at 16 April, with the gap on R3 heifers all but eliminated to 1.5c/kg.

The gap with Northern Ireland, which had been at 77c/kg last November on R3 steers, is now actually 2c/kg below Republic of Ireland price.

For R3 heifers, the differential stood at 62c/kg last November. Now they are 18c/kg below Republic of Ireland price. For plainer O3 grading cattle the turnaround is even more dramatic. While prices on O3 steers were €1.05/kg behind Britain and 77c/kg behind Northern Ireland last November, the differential is now completely eliminated, with prices almost 6c/kg ahead of Britain and over 2c/kg ahead of Northern Ireland.

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For heifers, the gap has gone from 83c/kg behind Britain last November to Irish prices being 14c/kg ahead by the middle of April.

The Northern Ireland O3 heifer prices were 65c/kg ahead last November, now they are 15c/kg behind.

British – and to a lesser extent Northern – prices have had a considerable premium since the horsemeat issue of 2013, and this is the first time since then that they have realigned with EU prices.

Full year falling

It has happened through almost a full year of falling British prices, and no doubt the 10% recovery in the value of the euro against sterling around the start of this year has contributed.

The weaker UK beef market reflects consumer resistance and problems the larger multiple retailers are having, with the discounters Lidl and Aldi taking part of their market share.

The fact that the differential with Ireland has been virtually eliminated has happened without any significant rise in Irish farm-gate prices, which demonstrates just how sustained and dramatic falls in Britain and Northern Ireland have been. It will be interesting to see if the Red Tractor brand recovers its premium pricing or if the UK market will stay more aligned with the rest of the main European beef producers.

Impact on mart trade

Falling beef prices in Northern Ireland have had an impact on the live cattle trade at marts in the border region, where Northern buyers are usually active in sourcing cattle. For the year to date, finishing cattle exported to Northern Ireland from the Republic are down 19% when compared with the same period last year. This amounts to almost 1,300 cattle.

Lower exports will also be partly caused by a recovery in exchange rates, with the euro currently worth £0.79. Last April, the euro was worth £0.71, which worked in the favour of Northern buyers. Northern mart data from the Irish Farmers Journal MartWatch shows that steer prices are down 37c/kg for cattle sold over the last six weeks when compared with sales in 2015 and 2014.