As Irish beef prices keep rising, the only concern facing farmers is the costs and availability of inputs, particularly feed and fertiliser in 2022.

With the cost and uncertainty, these have the potential to wipe out any gains made through price improvements over recent months.

It is also worth noting that the Irish R3 steer is 48c/kg behind what is being paid for the same product in Britain and 74c/kh behind Germany, the highest-priced beef market in Europe at present.

In fact the Irish price is so relatively weak that only Italy with a price of €4.38/kg for young bulls is behind Ireland.

Poland leapfrogs Irish price

Of all the countries with a farmgate price ahead of Ireland, the most eye-catching is Poland.

Poland’s beef industry is essentially supplied by the offspring of dairy cows and finished as young bulls. Poland is not a beef-consuming nation, with pork being the meat of choice. Therefore, Polish beef exports are the second largest in the EU after Ireland.

Up until October last year, Polish farmgate beef prices were always substantially behind Irish prices, up to €1kg at times.

It is amazing how such a transformation has taken place as Poland – the largest beef exporter in mainland Europe – has positioned itself to get its product placed in the highest-value markets.

While Irish prices have been increasing, they haven’t been able to achieve a similar stepped change and we are now operating towards the back of the pack.

This means that at present the product leaving Irish farms is getting much less than what is being paid for the R3 grade elsewhere.

The gap on the R3 grade is also wider than the Bord Bia composite prime price comparison which has had Irish farmgate prices fairly in line with those that are paid to farmers in the main markets in which we sell our beef. Why is this?

Specifications

A possible explanation could be that as prices have been rising in Ireland, factories have paid little attention to specifications. The BB price is calculated across all grades so it is possible that Irish R3 prices are lower but this could be offset by other grades being higher.

If this is the case, it tells us that farmers with the best R3 cattle are being underpaid relative to what is paid for other grades in a a more flat buying system.

Comment

Whatever the explanation, it is disappointing that in a particularly strong global beef market at present, Irish farmgate prices are well behind the significant beef-producing countries of Europe, as well as the US and Australia.

In fact, we are just about staying ahead of South America though the Argentinian price is as close to the Irish price as we are to the British price.

Irish farmers are producing a year-round beef product that is targeted towards the highest-value markets in the UK and Europe.

Looking at the prices currently being paid to farmers across Europe, Irish beef is either being used to service the lowest value markets or else it is leaving enhanced margins for the factories that are processing and selling it.

This was the case in the US in 2021 when record profits were achieved in the processing sector following the carryover of cattle from the previous year which were available at relatively low prices.

Unfortunately, there is no published information on the profitability of the larger Irish factory groups.