The trading circumstances for beef in the UK in the closing weeks of 2020 are truly exceptional.

In the 12 weeks to 1 November 2020, consumer spend in retail on beef in Britain increased by 9.7%, with volume purchased increasing by 4.8%.

Looking at the 52 weeks ending 1 November, the increase in consumer spend is even higher at 10.8%, with the volumes purchased increasing by 8.8% over the year to 1 November.

Pandemic impact

This, of course, has been driven by the pandemic and the recent shutdown of catering and hospitality suggests that when figures become available for November and December, the demand will increase further.

What has been lost by the out-of-home eating market for beef has been replaced by retail demand.

This is excellent news for British and NI farmers, as it has driven R3 steer prices to the equivalent of €4.22/kg in Britain and €4.12/kg in Northern Ireland for the week ending 15 November, dramatically ahead of the Irish R3 steer price of €3.60/kg.

That makes a 390kg steer worth €200 per head more in NI than it is south of the border.

This reflects the strength of the UK retail market, which has a preference for British beef. The loss of the catering sector has a major impact on Irish beef sales, as this is a huge outlet.

EU prices

The beef trade remains weak across the EU, as it is similarly disrupted by the pandemic.

The average EU R3 price was €3.52/kg, with Italy performing strongly at €3.90/kg for the R3 grade, while Sweden, as usual, is out on its own at €4.40/kg.

France and Germany are similar to Ireland at €3.60/kg and €3.61/kg respectively.

The weakness of the beef market in Europe is reflected by South American exporters now focusing on China as opposed to the EU because it is a much stronger market.

Global prices

Outside of Europe, the star performer is Australia at the equivalent of €4.20/kg, driven by low numbers available for slaughter and with the herd at 7m, the lowest for 20 years because of drought.

This will likely keep Australian prices high for the medium term as herd rebuilding continues.

Prices have been on the rise in Brazil too and though they have levelled off over the past week, the Brazilian real strengthened against the euro and dollar this week after a prolonged period of decline.

This had the effect of pushing the value of Brazilian steers above €3/kg for the first time since this time last year.

In the US, steer prices are averaging €3.20/kg equivalent, although it should be noted that a kill-out percentage of around 62% is typically achievable there.

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