There was a huge sigh of relief last week as the EU and UK finally came to an agreement on a free trade deal.
The consequences of a no deal would have been catastrophic for the beef industry and while the details on the deal are scant at the moment, it has added some more certainty to the trade.
While the deal is welcome, the devil will be in the detail of the new trade deal.
The flexibility that the UK will have to do similar trade deals with other countries will be a cause for concern and what standards the UK will apply to imports from other countries will be important for Irish beef farmers.
Stability in the currency markets and the exchange rate coming back to 90p/€1 will help Irish exporters moving product to the UK.
It’s a positive that given all the turbulence in the last few weeks that beef markets are starting off next week, the first week in 2021, pretty much where they left off from in 2020.
Factories have been a little more cautious in striking deals and quotes are generally moving off €3.70/kg for bullocks and €3.75/kg for heifers, while €3.80/kg is still available for larger loads of heifers and to regular sellers.
Looking back at the same week last year, quotes are running 10c to 15c/kg ahead of last year.
Finished cattle are still in short supply, with many smaller winter finishers opting out this year and instead storing cattle over the winter months for a grass-based summer finish.
Winter finishing margins have been non-existent and farmers have lost money on animals finished during the last number of years. Factories’ refusal to offer farmers contracts has seen a lot of winter finishers exit the business.
The preferred model for Irish factories has been to go down the feedlot route and offer these suppliers bonuses based on guaranteed numbers being killed on a weekly basis and offset these bonuses by reducing the price paid to smaller farmers.
These larger feedlots are then in a better position to buy feed and also have a stronger hand around the store ring if they know what is coming at the other end.
Bulls are also at a similar price, with €3.70/kg for R grading bulls and €3.80/kg for U grading bulls being quoted.
Young under-16-month bulls are generally moving off €3.65/kg to €3.70/kg.
The cow trade is also similar to where it left off last week. Good R grading cows are still in demand and getting quoted €3.30/kg and over for the right type of cows.
Plainer O grading cows are back at €3/kg, with P grading cows around €2.90/kg.
Last week’s kill was confined to two or three days in most factories. Nearly all factories are killing three days this week and will be back to a normal five-day kill next week.
With processing plants working on a three-day kill schedule this week in Northern Ireland, prices are holding steady.
Official quotes on prime cattle are holding at 368p to 370p/kg (€4.29/kg to €4.32/kg incl VAT) for U-3 grading animals.
Steers are moving off farm for around 380p/kg (€4.43/kg incl VAT), with heifers being bought at similar prices for in-spec animals.
Cull cows are a solid trade, with quotes for R3 animals holding at 270p/kg (€3.15/kg incl VAT), but deals start from 290p/kg (€3.38/kg incl VAT) with up to 310p/kg (€3.62/kg incl VAT) available for bigger numbers.