With the backlog of young bulls in the system and delay in getting them into factories, combined with the weak price received when they are eventually taken, farmers are feeling the strain. Prices across all categories have been weak in recent months but young bulls are particularly so. Is this unique to Ireland or an issue across the EU?

Bord Bia data shows Irish R3 young bull prices are averaging €3.50/kg in quarter one of 2019, the lowest level since quarter three of 2014 when R3 young bulls were also trading at €3.50/kg. Prior to that, the previous time they fell below €3.50/kg was in quarter three of 2011, when they dipped to €3.49/kg.

Price comparison

Cattle prices fluctuate over time, but for young bulls it is clear that this is one of the most depressed periods in recent years. The relative performance of Irish trade can only be properly judged when compared with prices paid in our main markets. UK cattle have been a weaker trade of late yet their R3 young bull is returning the equivalent of €3.84c/kg, 34c/kg better than the Irish price.

When the Irish beef industry comments on prices, it focuses on comparisons with the EU average on the basis that the UK, being a net importer of beef, places a special premium on domestic production. However when benchmarked against the EU average, the Irish price compares poorly. If we take the three low points over the past eight years when the R3 young bull price dipped to €3.50/kg, our relative performance is now at its worst.

In quarter three of 2011, when the Irish R3 young bull price was €3.49/kg, it was outperforming the EU average, which was €3.46/kg. In the third quarter of 2014, when the Irish price dipped to €3.50/kg for R3 young bulls, the EU average was €3.60/kg, 10c/kg better than the Irish price. That was the last time Irish R3 young bulls dipped to €3.50/kg before the present period. However, the picture is nowhere near as bleak on the continent because the EU average R3 young bull price is now 24c/kg better than the Irish price at €3.74/kg.

Market for young bull beef

In markets across continental Europe, young bull beef is interchangeable with steers, which are essentially a product produced in the UK and Ireland where the damp, relatively mild climate, suits grass production. The main customers for Irish beef in the UK have a preference for steers, though a percentage of young bulls is acceptable, the amount varying with supply availability of steers and heifers.

Growth of Poland

After Ireland, the biggest exporter of beef in the EU is Poland, which produces primarily young bulls from its male cattle, and has only a very small domestic market with Poles consuming just 2kg to 3kg per person annually. Poland joined the EU and since then has quickly modernised its industry across all sectors though it still lags behind the EU in overall development. Its meat industry has received substantial external investment over the past decade, with ABP now having three facilities established and the Hilton food group which specialise in retail packing of all meat species also having a factory located there which services central Europe.

Overall, Poland exported 360,000t of beef in 2016. Italy was the biggest market, taking 73,100t of this, followed by Germany on 48,200t or 15%. The UK has been a small but fast-growing market over the past five years. In 2013, the UK imported 7,538t of beef from Poland but this had increased to 14,800t in 2016, an increase of 60%. This increased further to 19,572t in 2017 before easing back to 17,160t in 2019, making Poland the third largest supplier of imported beef to the UK after Ireland, who supplied 205,508t in 2018, and the Netherlands, who supplied 19,298t.