After several months of relative stability in farm gate beef prices, widespread drops of 10c/kg to 15c/kg have been reported from the factories this week.

This time of year, the forequarter trade looks to the seasonal barbecue burger market to fill the gap left by the schools closing in the third week of July in Britain. So far this summer, the burger trade has been miserable in line with the weather.

The result of this has been a drop of up to 70c/kg in the value of forequarter cuts, where sales can be secured but even at reduced values volumes are not moving. Stocks are building up in all categories of manufacturing beef.

A further problem for the cattle trade is the ongoing slippage in hide values. The market had been under pressure with the Russian ban affecting the sales of luxury European cars with leather seats to Russia. Now, the wobble in the Chinese stock market has meant that the market for hides has fallen and the overall effect has been at least €10 coming out of hide values, with the threat of more.

French disruption in the lamb trade has also had an effect on beef with côte de boeuf (French-style ribs) back from €12/kg to €10.50/kg and no volume in demand even at that level.

It will be hoped that the present difficulty is temporary and recovery in the market will happen in the coming weeks when schools in Britain reopen and French protests and hostility to imported beef recedes. All of the forecasts point to lower volumes of beef cattle in the system compared with a year ago, but there has to be longer-term concerns.

Manufacturing market

The global manufacturing beef market is strong at present, driven by low supplies in the USA and forecasted reduction in the Australian herd. The US is herd-building at present, with heifer kill in the first six months of this year down 439,000 head and cow kill down 241,000 head. Cow numbers were 750,000 up on 1 July, the biggest year-on-year increase since 1993. There is an expectation that there will be a small increase of 1% to 2% i in 2016, but 2017 will see more substantial growth coinciding with the arrival of more beef on the Irish market from the increase in births this year.