Attempts by the factories to pull prices this week come against a backdrop of rising UK prices and sluggish continental prices.

Looking at the graph in Figure 1, we can see that UK prices plummeted from £3.60/kg in July 2015 to £3.22/kg by the end of April this year for R4L steers. Since then, however, they have been climbing steadily, reaching £3.62/kg last week, which not only exceeds the value of this time last year, it is also ahead of the AHDB’s five-year average.

Using the exchange rates that existed at the time, this was the equivalent of a peak of €5.07/kg in July 2015, falling to €4.03/kg in April 2016. With the drop in the value of sterling following the Brexit vote, the £3.62/kg equates to €4.20/kg last week, an apparently modest 17c/kg equivalent increase compared with the 40p/kg as shown in the graph in sterling. Ireland might expect to get spin-off from increasing British prices but the reality is that when converted to euro, UK price rises are relatively flat with nowhere near as dramatic an increase as is reflected in sterling.

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The British price fall of the spring is reflected in the euro price graph in Figure 2. This is when there was relative stability in the euro-sterling relationship at around 75p = £1. Since the vote on 23 June, the value of sterling dropped to 87p/kg a couple of weeks ago.

The strength of the euro partly explains why Irish prices haven’t really benefited from the rise in British prices. A further issue is the dominance of Red Tractor-approved beef in the retailers. Already seven out of the top ten buy exclusively UK-origin beef, with Sainsbury, Tesco and Asda using some Irish origin beef to sell alongside UK origin Red Tractor beef.

According to AHDB, Sainsbury’s offering of UK-origin beef increased from 86% to 93% between January and June this year. Tesco increased from 69% UK-origin to 80% UK-origin, while Asda was steady at 61% UK-origin beef in January and June 2015. With virtually all the supermarket imports being Irish, an increase in their use of UK origin means a displacement of Irish.

On the continent, our main markets in France and Italy have been noticeably sluggish for a prolonged period, with Sweden and the Netherlands vibrant. The Netherlands is a positive story for Irish beef, where the quality supplied is reflected in a price premium and a preference over the domestic production which is dairy based and has a farmgate price of 95c/kg below the Irish price on R3 young bulls compared with R3 Irish steers. Sweden is the opposite, with a farmgate price of over €1/kg higher than Irish therefore making it a valuable market in its own right.

France and Italy, for so long the most lucrative markets in Europe, continue in the doldrums. Italian R3 young bull prices were €3.80/kg, 3c/kg ahead of Ireland after lagging behind for most of this year.

Economic recession in Italy along with large supplies of Polish beef coming on to the market are offered as explanations of why this market, which used to be worth up to €1/kg more than Ireland, is now on par and frequently behind.

French domestic prices continue to lag behind Ireland, with just €3.52/kg paid for R3 steers in the last week of August compared with €4.06/kg in the same week in 2015. With French prices currently 25c/kg lower than Irish it would be difficult to do business in France but with retailers effectively boycotting imported beef following French farmer protests, the French market like Italy has ceased being an attractive outlet for Irish beef.