For a long time, Irish cow prices have been well ahead of the EU average and at times the highest compared with our main markets, with the exception of Sweden.

Recent falls

Over the last month, Irish O3 cow prices have fallen from €3.47/kg to €3.19/kg at the end of the first week in July. However, elsewhere in Europe the fall has been much less, with the EU average dropping just 2c/kg from €3.07/kg to €3.05/kg. For the first time in the past two years (with an exception in September 2017), British cow prices are ahead of Irish at the equivalent of €3.24/kg.

However, it should be noted that Irish cow prices were 40c/kg ahead of the EU average a month ago and despite sharp falls since, were still 14c/kg ahead of the EU average at the week ending 7 July.

France, which, along with Ireland, is traditionally the highest priced EU market for cows, was trading at €3.29/kg – 5c/kg higher than a month ago. German O3 cow prices slipped from €3.23/kg to €3.21/kg, while Italian prices have dropped from €3.03/kg to €2.97/kg.

R3 steer trade

Irish R3 steer prices have also fallen by much more than in our main export markets and the 18c/kg fall from €4.12c/kg to €3.94c/kg is more than three times the fall in EU average R3 steer and young bull prices over the past month.

The EU average on R3 young bulls was €3.72/kg at the end of last week compared with €3.77/kg at the end of the first week in June.

The gap with British R3 steers, which had closed to 16c/kg a month ago, has doubled to 32c/kg in the first week of July with British prices the equivalent of €4.26/kg, just 2c/kg less than a month ago. Italian prices on R3 young bulls are €3.98/kg, while Germany is on €3.76/kg and France is on €3.68/kg.

Rest of the world

Prices are weak in the world’s top three beef-exporting countries. Australian equivalent of R3 steers are trading at the equivalent of €3.04/kg, back 46c/kg from the same week in 2017. It is a similar trend with Australian cows, which are currently trading at the equivalent of €2.38/kg – 51c/kg back on the same week a year ago.

Prices in the US are also well down at the equivalent of €3.36/kg for comparable steers to the EU R3 grade. This is 29c/kg less than last year when the price was the equivalent of €3.65, though weakening of the US dollar is a factor in this. Brazil prices are just the equivalent of €1.81/kg which is down from €2.03/kg a year ago.

Cull of plain cows

The traditionally strong Irish cow market has been put under pressure by the surge in the cull of plain P- grading cows over the past couple of weeks. This of course has been largely driven by farmers being desperately short of grass and being inclined to cull faster and harder than they otherwise would have.

This is illustrated by the graph above, which shows that while numbers of well-fleshed cows are coming forward in numbers similar to last year, there has been an increase in the very plain cows that has grown as the drought conditions persisted.

Numbers of P- cows had already been ahead of last year in the first half of June but only by a couple of hundred. Compare this with the first week of July and the numbers of these plain cows slaughtered had increased to 1,021 (P- grade) compared to 588 of the same grade slaughtered in the same week last year.

The surge of these plain cows, a high percentage of which are under-fleshed and are of light carcase weight, has depressed the wider cow beef trade and has also spread into the trade for bulls. In addition, the trade for cow hides is particularly weak at present and these plain cows in particular would usually have low-value hides.

Interestingly, the kill of better-quality cows has roughly remained similar to last year. Looking at the O= and O- grades, numbers in June 2018 were actually lower than a year ago, while in July numbers were similar or marginally higher than a year earlier.

All prices exclude VAT and are supplied by Bord Bia, with kill numbers supplied by DAFM.