Since the beginning of 2018, finished cattle prices have been slightly ahead of last year’s levels (+1.3% or €0.05 per kg), averaging €3.91 per kg deadweight, excluding VAT, for R3 steers. As shown by the graph, this improvement mainly reflects the higher prices paid during the spring and early summer months. However, over recent weeks Irish cattle prices have fallen below those recorded during the equivalent period in 2017. For the most recent week on record, up to 30 September, R3 steers averaged €3.67 per kg deadweight, excluding VAT – their lowest level this year.

EU markets

The trend in Irish cattle prices reflects some difficulties across key European markets.

A recent report by the meat market observatory of the European Commission outlines that during the first half of this year, EU beef output grew by 1.4% in volume terms, or by 1.8% additional cattle processed.

Earlier forecasts had suggested that beef production would be stable in 2018, but drought conditions caused farmers to increase culling rates and to prime animals earlier, particularly in northern Europe.

In markets such as Sweden, for example, increased domestic production has greatly reduced the demand for imported beef, including Irish. In the medium-term, local supplies are likely to tighten, but for the meantime there is an abundant supply of Swedish beef available to customers who would normally purchase more from Ireland.

Despite this increase in European production, imports of beef into Europe have also been 18% higher for the year to date.

In particular, shipments from Brazil and Argentina increased by 29% and 47%, respectively.

Strengthening British price

The recent recovery in British cattle prices is of course a positive development for Irish producers. With over half of Irish beef exports destined for the UK market, the combination of higher-priced British beef, some tightening in prime cattle supplies there and a more favourable euro-sterling exchange rate approaching £0.88 to €1 provides exporters with a stronger platform for negotiation.

For the week ending 30 September, average prices for R3 steers in the UK were equivalent to €4.21/kg (excl. VAT). Across mainland Europe, where most Irish beef is exported, after the UK, cattle prices have generally been below last year’s levels.

For the most recent week, R-grade young bull prices averaged €3.69 in France, €3.82 in Germany, €3.78/kg in Italy and €3.73/kg in Spain, such that the average continental EU price equates to €3.74/kg (excl VAT). As the graph shows, the average price of Irish steers has therefore slipped below this European benchmark during recent weeks.

Cattle numbers

For the year to-date, cattle supplies at Irish meat plants have been 3.6%, or 48,000 head, ahead of 2017 levels. However, between now and the year-end, any further increase in cattle availability is likely to be limited. Last year, peak supplies were recorded later in the year: during November and December. Finishing animals had been housed early last autumn in many cases due to wet weather. This year, many cattle are behind target in terms of liveweight as a result of the summer drought.

The latest national herd statistics from Department of Agriculture’s AIM database suggest availability of steers will be lower. On 1 August, there were 8,500 fewer male cattle aged 12-24 months, arising from growing live exports and more young bull production. With regard to females, there was an additional 25,000 beef-bred heifers in the same age range, although some of this increase is already likely to have worked its way through the system. Meanwhile, many producers have marketed cull cows earlier in the year than usual, arising from the fodder scarcity.