Stronger cattle prices set positive backdrop for Beef Taskforce meeting
Current beef market developments have seen Irish cattle prices strengthen considerably over recent weeks, according to Meat Industry Ireland (MII), speaking after the latest Beef Taskforce meeting. DAFM reported prices for last week show R grade prime cattle at 422c/kg which represents a 5-year high for this stage of the year. According to Bord Bia figures, the Irish composite cattle price is on par with the Export Benchmark Price and while there is a gap with UK prices, Irish price is actually 30c/kg ahead of the basket of EU member states that take some 45% of our overall beef exports.
Continued strong retail demand is underpinning trade but food service business is only slowly re-emerging as Covid lockdown restrictions are tentatively lifted. Many EU markets are experiencing rising Covid numbers which will see restrictions on their hospitality sector in place for some time yet.
There is a supply-demand dynamic in the British market at present that is driving the domestic British cattle price. GB production is down 2-3% below last year’s levels and demand in British retail for domestic ‘Red Tractor’ British beef has driven price there. And while retail demand is strong, only 3 of the top ten UK retailers stock Irish beef. Not all of our beef goes to the UK and of the beef that does, not all of the cuts go into retail.
The Beef Taskforce meeting was also presented with the latest Grant Thornton draft report which clearly established the value generated by the primary beef processing sector for sales of Irish beef as well as quantifying the total amount paid to farmer suppliers for finished cattle. The analysis confirms that farmers receive 80% of the sales revenue processors generate from the sale of beef and beef by-products. The processing sector has cooperated with this exercise and engaged comprehensively with Grant Thornton.
Cormac Healy, Senior Director at MII said: “Meat Industry Ireland and its members remain committed to constructive engagement in the Beef Taskforce process and with completion of the various Grant Thornton independent reports, the Taskforce needs to engage on some of the key challenges facing our sector, including climate change commitments, post-Brexit trading environment and EU Trade deals.”