The last 12 months will go down as a positive period for beef finishing. A blip in November, where the beef prices dropped back to €4.70/kg, was the only negative in a solid year’s beef trading.
R3 bullocks started off the year at a low of €4.55 at the beginning of January 2022 but had climbed to a price of €5.62 by the end of May.
This peak set the scene for a good summer of trading and while beef price dropped back from May onwards, it levelled out at €5 to €5.10 for much of July, August and September.
The solid beef trade also improved the mart trade, with stores and forward store prices up in marts around the country. The average beef price for R3 bullocks for the full 12 months of 2022 stood at €4.78/kg (+18%) compared with a UK average price of €5.11 (+10%) and an EU young bull average price of €4.96/kg (+26%).
Increased demand across Europe drove demand during the year, with beef sales to France up 42% while beef sales to Italy were up 55% year on year.
The total kill in 2022 ended up at 1.82m head, up 7% on the 2021 kill. This increase was driven by a big increase in the cow kill, which was up 59,000 head or 14%.
The erosion in beef price had a profound effect on many smaller-scale finishers
As World Cup teams assembled on the football pitches in Qatar, football supporters around Europe and the UK assembled in pubs and restaurants to watch their teams’ progress.
This was a welcome boost as the kill came close to 40,000 week in October.
The peak was driven by a huge number of farmers opting to kill cattle before they entered the expensive winter finishing period. It resulted in a lower slaughter age in 2022 and it also meant carcase weights reduced by as much as 13kg in cows.
A burger bonanza was how some described it and manufacturing beef sales continued their strong performance throughout the winter months.
Factories, however, saw their opportunity in November to put pressure on the price and proceeded to drop prices at the same time that winter finishers were contemplating putting in cattle for a spring 2023 finish.
The erosion in beef price had a profound effect on many smaller-scale finishers.
When many looked at store prices, feed prices and beef prices, the figures didn’t stack up and they opted out of the business, leaving sheds empty.
Numbers are forecast to continue to be very tight
Poor factory engagement on forward prices or contracts made the situation worse and that strategy is currently coming back to bite processors as numbers of finished cattle remain very tight in early spring 2023.
Numbers are forecast to continue to be very tight, with Bord Bia forecasting a 5% drop in numbers for the first quarter of 2023 and a further 6% drop in numbers in quarter two.
While beef consumption is under pressure in some of our main markets, the picture looks relatively positive, with a further decline in beef production across Europe and the UK expected to keep prices stable during 2023.