Farmers in Britain have taken a hit on beef prices, just like their Irish counterparts. As the graph below illustrates, farm gate prices were trading well below the five-year average before the short-lived upturn in April which lasted for just a month. Prices now in Britain are just ahead of Ireland on R3 steers and actually below Ireland on R3 heifers and O3 cows.
UK agriculture update
In 2018, the UK breeding herd declined by 60,000 head, which was driven by increased prices for cull cows coupled with forage shortages throughout the hot summer of 2018. Similarly, UK calf registrations in 2018 declined by 48,000 head while, according to AHDB forecasts, 2019 calf registrations will be slightly lower again due to herd contraction and higher number of heifers slaughtered in 2018.
According to BCMS data, prime cattle slaughter in 2019 is expected to reach 1.93 million head, which equates to (-3%) or 63,000 head decline on 2018 figures. UK production is set to fall by 3.5% this year to 880,000t. Further to this, AHDB expects supply to become a little tight at peak kill periods in 2019 after a reasonably strong start to the year. The supply for the first six months of 2020 may be slightly restricted due to decreased calf registrations in 2018.
The better weather at the beginning of the year has helped animals keep better condition than last year while higher concentrate feeding due to last year’s forage shortage also boosted carcase weights in the short term
Total UK prime cattle slaughtering for the first quarter of 2019 came to 497,400 head, up 1% year-on-year. This was driven by a rise in the number of heifers coming forward. Prime carcase weights were up 1% on average to 355.5kg/head in April. The 1.3% increase in steers and young bull weights and 1.5% for heifers is perhaps because farmers were holding on to cattle. The better weather at the beginning of the year has helped animals keep better condition than last year while higher concentrate feeding due to last year’s forage shortage also boosted carcase weights in the short term. This trend is due to continue to mid-summer before weights drop back slightly in the second half of 2019 as supply becomes tighter. However, in the long term carcase weights are expected to decline due to increased traditional breeds and dairy-sired cattle numbers.
The UK is a net importer of beef, with imports supplying a quarter of all beef consumed there last year. In 2018, against the backdrop of declining beef consumption (-1.5%), a declining UK herd and currency fluctuation, Irish beef exports to the UK grew by 4% or 15,000 cwt to 298,000 cwt. The UK market accounts for 52% of total Irish beef exports equating to over 70% of UK beef imports. While the total non-EU beef exports (primarily from South America) to the UK reached 20,000 cwt in 2018 which equates to 6% of total imports.
For the first three months of 2019, UK beef imports have declined by 11% (Mintec). According to the latest CSO data for 2019, Q1, Irish beef exports have reached 63,134 cwt (-5% yoy). However, even with this decline in imports, Irish beef still accounted for 78% of the total UK beef imports. In contrast, UK beef imports from Non-EU countries was 1,650, representing a decline of 66% from the previous year.
Irish beef exports command a strong position across the UK. Forty-six per cent of Irish beef exports are destined for UK retail channel and Irish beef is the only imported beef sold in the UK grocery. Thirty-two per cent of Irish beef is sent for UK manufacturing, while the remaining 22% is found in the UK foodservice channel where 40% of the total beef volumes sold is Irish as in the graph above. Irish beef is the only import available in the mainstream UK grocery sector and is stocked by the top three UK supermarket groups – Tesco, Sainsbury’s and Asda. While following country of origin beef labelling rules, it is still presented alongside similar UK beef products.
Almost half, 46% of Irish beef sales to the UK are into the retail or supermarket sector. For fresh beef, the UK grocery market accounts for over 270,000t (Kantar 2019) and was worth £2.1bn in sales in 2018. UK retail is dominated by mince beef, which accounts for over 50% of volumes sold. The remaining 50% of beef sold is broken down as steaks (18.5%), roasting joints (16.5%), stewing beef (11%) and added-value beef (4%). However, when broken down by sale value terms, the market share changes. Mince (£722m) and steaks (£680m) account for just over 30% of the market each.
Over the past five years for retail fresh beef sales, the mince and steak categories have been growing year-on-year at the expense of roasting joints and stewing beef (see graph).
Much of this is driven by shoppers looking for quick midweek meals whereby mince and frying steaks are seen as the best choice. On top of this, when millennials purchase fresh beef, they look for higher-protein leaner beef cuts at the expense of hindquarter joints and stewing beef. These trends are expected to continue, which will have further implication for carcase utilisation.
Irish beef is also the import of choice for the food service sector, which the Irish farmers Journal explored in detail last week, and the manufacturing sector, where beef is an ingredient in either ready meal or pie manufacture.
This strong connection of Irish beef to the UK is down to a number of factors. Ireland and Britain have similar types of beef production system, based on suckler cows and predominantly steer beef as opposed to young bulls.
Quality assurance is now a requirement for all high-value export markets for Irish beef and the UK has led the demand for Quality Assurance across all categories of the market
There is also a historical link going back hundreds of years when Irish beef in England came from store cattle shipped live across the Irish sea for finishing. In more recent times, major Irish beef and sheep processing companies have become the prominent processors in Britain as well. Quality assurance is now a requirement for all high-value export markets for Irish beef and the UK has led the demand for Quality Assurance across all categories of the market. The Bord Bia QA scheme is accepted by all customers of beef in the UK as being equivalent to the various UK schemes.
The acceptance of Irish beef in the UK is demonstrated by research undertaken by Bord Bia with UK beef consumers as shown in the graph above. Bord Bia’s Insight Centre, The Thinking House, undertakes ongoing consumer studies in the UK, and the most recent commissioned YouGov research (December 2018) found UK consumers have a clear affiliation with and acceptance of Irish beef. This puts a willingness by UK consumers to buy Irish beef at 81% which is just behind the scores achieved for both Scottish and English beef, with many UK consumers considering Irish beef as local. Interestingly, this same research found that only 33% of UK consumers would purchase US beef, 28% Brazilian beef and 22% Uruguayan beef, further demonstrating the strong reputation of Irish beef in the UK.
Promotion of Irish beef in Britain
With the acceptance of Irish beef by British consumers close to par with beef from the UK, Bord Bia shares the interest of the UK levy boards in encouraging consumer use of beef rather than focusing exclusively on the origin. Compliance with State aid rules means that promotion cannot be on a national basis and the theme chosen by Bord Bia is to focus on the quality and welfare credentials of Irish beef production as opposed to just the fact that it is Irish. That means that Origin Green and the QA system are the cornerstone of the Bord Bia promotion message and are themes that resonate with UK consumers as well as being at the core of specifications for all significant customers.
Farmers in Britain have taken a hit on beef prices, just like their Irish counterparts. As the graph below illustrates, farm gate prices were trading well below the five-year average before the short-lived upturn in April which lasted for just a month. Prices now in Britain are just ahead of Ireland on R3 steers and actually below Ireland on R3 heifers and O3 cows.
UK agriculture update
In 2018, the UK breeding herd declined by 60,000 head, which was driven by increased prices for cull cows coupled with forage shortages throughout the hot summer of 2018. Similarly, UK calf registrations in 2018 declined by 48,000 head while, according to AHDB forecasts, 2019 calf registrations will be slightly lower again due to herd contraction and higher number of heifers slaughtered in 2018.
According to BCMS data, prime cattle slaughter in 2019 is expected to reach 1.93 million head, which equates to (-3%) or 63,000 head decline on 2018 figures. UK production is set to fall by 3.5% this year to 880,000t. Further to this, AHDB expects supply to become a little tight at peak kill periods in 2019 after a reasonably strong start to the year. The supply for the first six months of 2020 may be slightly restricted due to decreased calf registrations in 2018.
The better weather at the beginning of the year has helped animals keep better condition than last year while higher concentrate feeding due to last year’s forage shortage also boosted carcase weights in the short term
Total UK prime cattle slaughtering for the first quarter of 2019 came to 497,400 head, up 1% year-on-year. This was driven by a rise in the number of heifers coming forward. Prime carcase weights were up 1% on average to 355.5kg/head in April. The 1.3% increase in steers and young bull weights and 1.5% for heifers is perhaps because farmers were holding on to cattle. The better weather at the beginning of the year has helped animals keep better condition than last year while higher concentrate feeding due to last year’s forage shortage also boosted carcase weights in the short term. This trend is due to continue to mid-summer before weights drop back slightly in the second half of 2019 as supply becomes tighter. However, in the long term carcase weights are expected to decline due to increased traditional breeds and dairy-sired cattle numbers.
The UK is a net importer of beef, with imports supplying a quarter of all beef consumed there last year. In 2018, against the backdrop of declining beef consumption (-1.5%), a declining UK herd and currency fluctuation, Irish beef exports to the UK grew by 4% or 15,000 cwt to 298,000 cwt. The UK market accounts for 52% of total Irish beef exports equating to over 70% of UK beef imports. While the total non-EU beef exports (primarily from South America) to the UK reached 20,000 cwt in 2018 which equates to 6% of total imports.
For the first three months of 2019, UK beef imports have declined by 11% (Mintec). According to the latest CSO data for 2019, Q1, Irish beef exports have reached 63,134 cwt (-5% yoy). However, even with this decline in imports, Irish beef still accounted for 78% of the total UK beef imports. In contrast, UK beef imports from Non-EU countries was 1,650, representing a decline of 66% from the previous year.
Irish beef exports command a strong position across the UK. Forty-six per cent of Irish beef exports are destined for UK retail channel and Irish beef is the only imported beef sold in the UK grocery. Thirty-two per cent of Irish beef is sent for UK manufacturing, while the remaining 22% is found in the UK foodservice channel where 40% of the total beef volumes sold is Irish as in the graph above. Irish beef is the only import available in the mainstream UK grocery sector and is stocked by the top three UK supermarket groups – Tesco, Sainsbury’s and Asda. While following country of origin beef labelling rules, it is still presented alongside similar UK beef products.
Almost half, 46% of Irish beef sales to the UK are into the retail or supermarket sector. For fresh beef, the UK grocery market accounts for over 270,000t (Kantar 2019) and was worth £2.1bn in sales in 2018. UK retail is dominated by mince beef, which accounts for over 50% of volumes sold. The remaining 50% of beef sold is broken down as steaks (18.5%), roasting joints (16.5%), stewing beef (11%) and added-value beef (4%). However, when broken down by sale value terms, the market share changes. Mince (£722m) and steaks (£680m) account for just over 30% of the market each.
Over the past five years for retail fresh beef sales, the mince and steak categories have been growing year-on-year at the expense of roasting joints and stewing beef (see graph).
Much of this is driven by shoppers looking for quick midweek meals whereby mince and frying steaks are seen as the best choice. On top of this, when millennials purchase fresh beef, they look for higher-protein leaner beef cuts at the expense of hindquarter joints and stewing beef. These trends are expected to continue, which will have further implication for carcase utilisation.
Irish beef is also the import of choice for the food service sector, which the Irish farmers Journal explored in detail last week, and the manufacturing sector, where beef is an ingredient in either ready meal or pie manufacture.
This strong connection of Irish beef to the UK is down to a number of factors. Ireland and Britain have similar types of beef production system, based on suckler cows and predominantly steer beef as opposed to young bulls.
Quality assurance is now a requirement for all high-value export markets for Irish beef and the UK has led the demand for Quality Assurance across all categories of the market
There is also a historical link going back hundreds of years when Irish beef in England came from store cattle shipped live across the Irish sea for finishing. In more recent times, major Irish beef and sheep processing companies have become the prominent processors in Britain as well. Quality assurance is now a requirement for all high-value export markets for Irish beef and the UK has led the demand for Quality Assurance across all categories of the market. The Bord Bia QA scheme is accepted by all customers of beef in the UK as being equivalent to the various UK schemes.
The acceptance of Irish beef in the UK is demonstrated by research undertaken by Bord Bia with UK beef consumers as shown in the graph above. Bord Bia’s Insight Centre, The Thinking House, undertakes ongoing consumer studies in the UK, and the most recent commissioned YouGov research (December 2018) found UK consumers have a clear affiliation with and acceptance of Irish beef. This puts a willingness by UK consumers to buy Irish beef at 81% which is just behind the scores achieved for both Scottish and English beef, with many UK consumers considering Irish beef as local. Interestingly, this same research found that only 33% of UK consumers would purchase US beef, 28% Brazilian beef and 22% Uruguayan beef, further demonstrating the strong reputation of Irish beef in the UK.
Promotion of Irish beef in Britain
With the acceptance of Irish beef by British consumers close to par with beef from the UK, Bord Bia shares the interest of the UK levy boards in encouraging consumer use of beef rather than focusing exclusively on the origin. Compliance with State aid rules means that promotion cannot be on a national basis and the theme chosen by Bord Bia is to focus on the quality and welfare credentials of Irish beef production as opposed to just the fact that it is Irish. That means that Origin Green and the QA system are the cornerstone of the Bord Bia promotion message and are themes that resonate with UK consumers as well as being at the core of specifications for all significant customers.
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