In addition to the uncertainty created by Brexit, prices around the world have been under pressure in recent times. This reflects the fact that restocking of herds is more or less complete in two of the major global exporting countries, the USA and Australia, where farmgate prices had climbed above those in the EU but are now significantly behind.

For Australia, Brazil and the USA, it is steer data that is used, while the EU average is based on R3 young bulls with all data supplied by Bord Bia.

USA

Prices in the US peaked in the spring of 2015 around the time that market opened to Irish exporters. In April that year, they reached as high as the equivalent of €5.45/kg at a time when the EU average was over a euro behind at €4.32/kg. Since then, there has been slippage of prices in the USA but even this time last year, they were still well ahead of the EU average on the equivalent of €4.14/kg compared with the EU young bull average of €3.75/kg. However, if we fast forward to the most recent data, we discover there is further slippage in the USA average to the equivalent of €3.57/kg whereas the EU young bull average is now ahead at €3.91/kg.

Australia

In Australia, there was also drought-driven supply shortages at a time when global manufacturing beef markets were strong. This drove Australian prices for the EU equivalent R3 steer beef to almost €4.00/kg in August 2016 when prices reached the equivalent of €3.98/kg, 19c/kg ahead of the EU average at the time.

This level continued up until this time last year, when the Australian price was still the equivalent of €3.97/kg, 22c/kg ahead of the EU average of €3.75/kg in early March 2017.

Moving forward to this year, Australian prices like those in the US have fallen significantly from those highs. The most recent figures show that Australian prices have fallen to the equivalent of €3.06/kg, which is well behind the EU average of €3.91/kg.

Brazil

Brazil is traditionally one of the lowest-cost beef-producing countries in the world and is generally significantly below the other major exporters. In March 2017, its average steer was the equivalent of €2.67/kg. In the year since then, this price has fallen to the equivalent of €2.15/kg, which is almost a euro lower than Australia and closer to two euros behind the EU average.

These global prices are influenced by currency movements as much as market trends. However, for Irish farmers who receive their payments in euro, the competitiveness of our beef in international markets ultimately shapes farmgate prices.

If the dollar or other international currencies weaken, it makes their product more competitive and hits Irish farmers. Of course farmers in Northern Ireland have had the benefit of weaker sterling in recent times, making their exports more completive and the UK market less attractive to suppliers from the eurozone.

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