What’s the beef with current beef market declines?

What’s the beef with current beef market declines?

Irish beef prices have always preoccupied the minds of livestock farmers in this country and have even entered the public consciousness from time to time. It wasn’t long ago that Irish beef farmers were under severe pressure, staging numerous demonstrations outside meat processing plants three years ago in pre-Covid times.

At one point in 2019, there was just €3.42 per kilo of R3 steer cattle beef paid to Irish farmers. This was at a time when prices in Northern Ireland averaged at €3.86c/kg, a 44c/kg price difference. Fortunately, the landscape has shifted in the years since with Bord Bia Market Tracking reporting a milestone high of €5.32c/kg being paid in June of this year. This was also at a time when Irish R3 steer beef was 6c/kg ahead of our UK counterparts.?

This was a record high in Irish memory, at a time when input costs including fuel, feed and fertilisers also reached and continue to hit record highs. Yet, fast forward only five months and the dramatic fluctuation is stark, as since June the price of beef has continually declined.?

Bord Bia’s Beef Tracking statistics currently show the same grade of beef this week making €4.52c/kg. This is a 25% drop compared with the June high.

The concerning trend is a worldwide issue as the UN global food index shows meat and dairy prices have been consistently falling for the four last months. Farming organisations including ICSA are angered because, with its unerring premium quality, Irish beef is reported to be 46c/kg behind Polish prices.?

For the week ending November 12, R3 young bulls commanded a price of €4.94c/kg in Poland while the latest EU average figures for R3 steer beef stand at €5.06c/kg. This is over 54c/kg better than the Irish equivalent.?

Some of our European counterparts are getting prices including France at €5.31c/kg, UK at €5.13c/kg, Portugal at €5.29c/kg while International partners such as the US and Argentina boast €5.42c/kg and €4.64c/kg at for R3 Steers at the moment.??

With this, the ICSA are claiming that the ‘Sustainable Beef and Lamb Assurance Scheme’ is a failure. One of its main objectives is to ‘effectively communicate the current credentials of the Irish livestock sector to key customers and to highlight how the industry is focussing on optimising its performance in a number of key sustainability areas.’

It is hard to lay the blame at Bord Bia’s feet however when prices only four months ago were at an all time high. The company has stated in its latest cattle trade and price report that: “High levels of inflation in key export markets has impacted on consumer demand for beef, as shopper spending has come under increasing pressure. While manufacturing beef remains somewhat more buoyant, the retail market is particularly challenging with customers focusing increasingly on pigmeat and poultry, which remain more competitive in price terms.”

Joe Burke, Beef and Livestock Sector Manager with Bord Bia told Agri Insider that beef prices paid to farmers will recover with customer demand for beef in the lead up to Christmas coupled with cattle numbers tightening on Irish farms manifesting in better prices for Irish farmers.

Bord Bia also announced in October that it was investing €1,000,000 in beef marketing across key UK and EU markets this autumn to support the sector faced with increasingly difficult trading conditions.?

Michael Murphy, interim CEO of Bord Bia, highlighted that: “Bord Bia is investing almost €1 million in beef promotions across Europe and the UK this autumn, in a concerted effort to meet the rising challenges of the marketplace and the cost-of-living crisis, which will impact consumer spending.”

So in reality, where will the Irish beef price go from here? Early 2023 will more than likely ‘remain challenging’ for farmers according to an outlook report published by the European Commission in October. On a positive note there has been an increase in beef prices for the second consecutive week which is being driven by the demand for cattle at the factories to supply the Christmas market. Recent history suggests that our prices will align with the European average again as it has historically done and this may be a temporary decline.