While Irish factory prices have been satisfactory for farmers in recent months compared with recent years, they have dropped well of the pace compared with factory prices in other EU countries in recent weeks.
This is also the case when compared with Northern Ireland, Britain and major global beef-producing countries and exporters such as the USA and Australia.
R3 steer/young bull
The main beef category in the EU27 is for R3 young bulls with steer beef production confined to the island of Ireland and Britain.
Steer beef production is a higher-cost model than the more intensive young bull product but the market tends not to reflect this.
At present, the Irish R3 steer price of 415c/kg lags behind the R3 young bull price in all our main export markets.
Sweden is the highest value market in the EU27 at 477c/kg followed by Germany on 458/kg. Poland surprisingly are on 430c/kg followed by France on 425c/kg and the Netherlands on 420c/kg with Spain 1c/kg below Irish R3 steers at 414c/kg. The Italian R3 price appeared incorrect so the U3 price of 436c/kg has been substituted.
Exceptional performance in Poland and Netherlands
What is most striking from this price comparison is the fact that prices in Poland and the Netherlands have surged past Ireland over the past year.
In November 2020, the Polish R3 young bull price lagged 55c/kg below the Irish R3 steer price but today it is actually 15c/kg ahead.
With the Netherlands it was an even bigger gap, 78c/kg below the Irish price this time last year to being 5c/kg ahead at present.
With Britain and Northern Ireland, their prices are consistently ahead with R3 steers worth the equivalent of 479c/kg in the north and 502c/kg in Britain.
Rest of the world
What is really underpinning beef prices at present is the fact that there is no cheap beef being produced anywhere in the world at present with the possible exception of Brazil. Even there with the uncertainty over China, the price has made a dramatic recovery over the past couple of weeks to sit at the equivalent of 328c/kg this week, a 50c/kg increase over the past two weeks.
Australia is setting the pace globally at 472c/kg equivalent as herd rebuilding means they will have the lowest slaughter numbers in 2021 for 36 years while the USA price of 399c/kg is for a carcase kill out of over 60%.
While the Irish R3 steer beef price is over 50c/kg better than this time last year, compared with the performance of farm gate prices in the main countries we trade with and other major beef exporting nations they are nothing special.
It also has to be remembered that when comparing Irish prices with those in mainland Europe, it is comparing with young bulls which have a much more efficient food conversion than steers. If the market valued steer beef properly, they should be several cents ahead of young bull price, not behind it.
Similarly, when comparing with Australia or the US, they have access to growth promoting hormones and these used on grain fed beef doesn’t seem to diminish the market value of the product in Asian and domestic markets.
Irish farmers are lumbered with the highest cost system and a product that is selling in commodity markets judging on the relative price paid to Irish farmers.