The past year will go down as a positive one for beef prices.
The average beef price increased by over 40c/kg in 2021 compared to 2020, to settle at €4.28/kg up to the beginning of December.
Supply and demand has been one of the main reasons we have seen a shift in price in 2021 and while numbers will recover somewhat in 2022, the tightness in supply will remain until June/July 2022.
The Irish kill was back 80,000 head on 2020 and we expect to see a recovery of between 45,000-55,000 cattle in 2022.
Present indications are that markets will remain steady for much of 2022.
Eyes will remain on China to see whether the Irish beef ban will be lifted in 2022. Other important emerging markets in 2022 will be southern Asia, South Korea and the Philippines.
A renewed confidence in the suckler sector is also expected to continue in 2022, with the announcement of continued supports in the next CAP.
Live exports are a concern, having reduced over the last two years and all eyes will be on calf exports for spring 2022.
A recovery in the veal trade across Europe should help demand for calves in early spring, and Italy and Spain are also becoming increasingly important markets for dairy beef calves.
The Middle Eastern trade has stagnated and while another boat is planned for Libya in January, the Turkish market remains problematic and present indications suggest a slow recovery for weanling exports to Turkey.
Inside the farm gate, fertiliser prices are a very big concern and any increase in margins in 2021 will be quickly taken care of by high input prices in 2022.
Beef farmers have also had to deal with increased fuel costs, electricity costs and feed costs, so cost of production of beef will rise in 2022 and farm gate prices will need to increase for farmers to stand still.
On the supports side, 2022 will be the calm before the storm, with everything changing in 2023. There are some farmers, especially full-time intensive beef farmers, who will be in for a big shock when the 2023 support payments hit the bank account.