The vote to leave the European Union has had little impact on base quotes for prime U-3 grade cattle in Northern Ireland (NI). Most quotes remained unchanged at the end of week, with offers generally around 322 to 326p/kg.

There are reports that some factories might move to a base of 330p/kg for the start of next week, although generally there is a strong reluctance to take prices much higher, especially given that the trade in NI is on a par with much of England.

As always, the base quote is only the starting point for negotiation, and with finished cattle numbers tight, farmers with a number of cattle to sell remain in a strong bargaining position. Regular suppliers have obtained 336p/kg and above this week, and in some exceptional cases where cattle are destined for the butcher trade, deals have been done into the 340’s.

Looking at the impact of the Brexit vote on the NI beef industry, in the short term there is some benefit if Sterling remains under pressure against the Euro. That helps make some fifth quarter cuts from NI cattle price competitive in the European market. It also increases the cost of imports of Republic of Ireland beef, which does compete directly with NI beef, especially in wholesale markets in Britain. However, it should be recognised that the strength of Sterling against the Euro has much less of an influence on the overall price of NI beef, compared to lamb, which is mostly driven by southern Irish buyers in NI marts.

In the medium term, while Sterling took an immediate hit when the referendum result was announced this week, the Euro could also be weakened by the UK decision to leave. The two might balance each other out in the months ahead.

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