This is a subscriber-only article
Steak cuts are coming “under pressure” at the moment, while demand for mince and burgers remains “extremely good”, says Denis Brennan of Slaney Meats, Co Wexford.
The representative of the southeast processor said “the problem with mince and burgers is it’s cheap” and that “when the carcase arrives into a factory, so much of the entire value of that carcase is balanced on the steak cuts”.
“Striploins could go somewhere between 6kg and 12kg, depending on a very small one or a massive one. That amount of beef, because of the price it can obtain at the end, controls a very, very high market, or percentage of the carcase.
Under pressure
“It’s the steak cuts that seem to be coming under pressure at the moment.
"We want mince to be a good trade because it is a huge part of the carcase, but we don’t want the mince to be the driving force of the carcase value, because then, basically, you’re kind of competing with the white meats, chicken and pork, to a certain extent from a price point of view. That’s not sustainable at all,” he said.
Brennan was speaking at a Teagasc beef seminar in Enniscorthy on Thursday night. The meeting focused on beef sector innovation, the market outlook and increased input costs. Some 50 farmers were in attendance.
Demand, not supply, the issue
The Slaney Meats representative told farmers that, overall, reduced demand for beef, not an influx of cattle for slaughter, has led to a decrease in the beef price.
He said that because of the export nature of the beef market, weekly national kill increases of 3,000 head of cattle aren’t going to impact price, but rather reduced beef demand will.
“It’s not the number of cattle on offer at the moment that are driving price down. That 3,000 extra cattle doesn’t make a difference,” he said.
Future outlook
When asked about the long-term market outlook for beef if a market can’t be found for premium cuts, Brennan said: “The simple fact of the matter is if the demand is there for the beef, the price will be paid for it.”
“The proof of that is [you] only have to refer back to two months ago when we were €4.80/kg on the grid. It wasn’t what you would call a bad price.
"I suppose all we can hope for is that we can return maybe not back to the very, very peak. Maybe the very, very peak of earlier this year is probably, [not] long-term.
"At the moment, it seems to be ‘a peak’ and, unfortunately, there’s only one peak.
“But if we could get back over the next two or three years, back to a higher maybe base price than what they are now. If the demand is there, we’ll pay it.
"The very proof of the matter is that only a few months ago when the demand was exceptionally good, the price was exceptionally good.”
UK market ‘extremely important’
On Ireland’s reliance on the UK beef market, Denis Brennan told farmers: “I think as a country we have started to target Europe more. That could be for a number of reasons, but Brexit would be definitely one of them.
“[The UK has] 60m affluent people basically a stone’s throw away, so they are an extremely important market. It should never be underestimated how important the UK market is to us.”
Prices
In this week’s Beef Trends analysis, beef editor Adam Woods reports that procurement managers are a little more interested in cattle, with a few late night and early morning texts about cattle supplies coming farmers' way.
He says the thinking on the ground is that the trade has bottomed out and the only way beef price can go now is up.
The general run of quotes hasn’t changed a lot in recent days, with bullocks working off €4.50/kg to €4.55/kg and heifers working off €4.55/kg to €4.60/kg, up somewhat from the lows of €4.30/kg a fortnight ago.
SHARING OPTIONS: