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It is clear this weekend that the long-awaited rise in beef prices is on its way. As reported in the Irish Farmers Journal over recent weeks, the basic requirements for an increase in prices have been moving into place.
The most spectacular rises, though from a lower base, have been outside the EU, driven by the demand from China and US manufacturing beef imports. Closer to home prices have been on the rise in the North, Britain and throughout the main markets for Irish beef in the rest of the EU.
Last week’s trade
In the figures released by the EU on Friday for the week ending 1 December, the Irish R3 steer price averages 342c/kg (ex-VAT), 20c/kg behind the 362c/kg EU average R3 young bull price.
When the Irish price is compared with the R3 steer price in the North, which was the equivalent of 391c/kg (49c/kg more) and Britain at 292c/kg (50c/kg more), it is clear that there is headroom for an Irish price increase, as this is the market for half our beef exports.
Sterling has strengthened to 84.5p/€1 this week, which makes Irish beef priced in euro better value in the UK market.
The next lowest is Spain at 352c/kg, which is well ahead of the Irish R3 steer price
It isn’t just the UK market that is well ahead of Ireland – the weakest prices for R3 young bulls on the continent at 341c/kg is in the Netherlands and the next lowest is Spain at 352c/kg, which is well ahead of the Irish R3 steer price.
The gap widens in our other main export markets, with 375c/kg available in Italy for R3 steers, 376c/kg in Germany and 385c/kg in France.
Sweden is consistently a strong performer though, at the equivalent of 392c/kg - it is on par with Northern Ireland and Britain.
It is a similar trend on heifers and cows, where the Irish price is lagging behind the price paid to farmers in countries to which Irish beef is exported.
After months of farmer frustration and protests, factory prices are finally on the turn. The modest increases being mentioned won’t get anyone excited, but the important thing is that it is finally a move in the right direction. It is also a feature of rising markets that when they move they can move quite quickly.
While an increase like the one that happened in Brazil over the first three weeks of November - when prices jumped 76c/kg - won’t happen in Ireland, there is room in the marketplace for a significant move.
Irrespective of the rights and wrongs of recent protests, a significant price increase will do more than anything else to bring the threat of protests to an end, something that is in both farmers' and factories' interests.
Beef prices in 2019 haven’t been viable for farmers; disruption to supply damages Ireland’s reputation as a reliable supplier of quality beef.
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