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The Irish beef industry remains closely aligned and mirrored with what British consumers are looking for, according to Joe Burke from Bord Bia.
“It is just speculation at this stage before deals are done, but we have heard a lot about other suppliers coming in and displacing our hold on the UK market,” Burke said at the Muskerry Macra talk entitled The implications of Brexit on Irish Agriculture. “We wouldn’t want to be looking at that situation but I am optimistic in that regard because we have the profile of product the customer is looking for," Burke added.
The Irish beef industry has designed its marketing around the British consumer, Burke added. Some €4.5bn worth of Irish food was exported to the UK last year. The fact that British farmers have been promised support from the British exchequer to replace their basic payment may also work in Ireland’s favour.
“If they are not getting higher price and support mechanism through British government then beef production volumes in England will decline,” Burke said.
The average differential between Irish and UK steer price is 33c/kg to date this year, narrower than 2015. British cattle prices fell immediately after the Brexit referendum in euro terms and have recovered slightly since then. However, in sterling terms they have risen by 15% since May.
The British R3 steer price is currently at the equivalent of €4.17c/kg. Irish exports into the UK are now more expensive and less price competitive. However, cattle supplies in Britain are quite tight.
European market
The European Commission is forecasting that overall beef volumes in Europe will increase by 3% this year, which is “quite significant”. This is a direct result of the more difficult milk market; the issue will be finding a market for the rise in volume.
“Continental European markets are well behind this year,” Burke said. “There is a differential of 20c/kg between Irish cattle and other young bulls across Europe. The continental EU average for an R3 steer is €3.48/kg, 20c lower than Irish R3 steer price.”
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