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The Irish beef kill will exceed 1.7m head in 2017, the highest recorded in the country since 2003.
Industry analysts predicted a fall in beef price during 2017 but instead it remained steady, which is encouraging given the increase in throughput.
The weekly kill hit a peak of 40,529 head for the week ending 2 December, with no resulting negative impact on beef price. This puts to bed the old industry line that once the kill goes above 32,000 cattle, the supply/demand balance shifts into oversupply.
While this is all positive, margins in beef finishing remain low. This is particularly evident in winter finishing.
In the autumn of 2016, Teagasc said the breakeven price required for winter finished beef was €4.24/kg. The base price for an R3 steer hovered around €3.80 for much of spring 2017, meaning many of these store cattle purchased in the autumn of 2016 died in debt.
Processors can blame it on expensive store cattle, Brexit, or the changing economic climate, but the industry will soon need to answer the question as to whether it wants beef from December to May. At the moment, it is the BPS money and not beef price that is keeping these farmers around the ring.
With increased beef consumption in most of our major European markets, surely some of this positive sentiment should be passed on to the primary producer.
This unfortunately hasn’t happened, with beef price up 1% to 2% on average across steer, heifer and young bull categories. This equates to between 2c/kg and 8c/kg or just €7 to €28 on a 350kg carcase – hardly cause for celebration.
However, comparing Irish beef price to the EU price, we have performed quite well. Cow beef recorded the largest increase over the past 12 months, with the average 2016 price of €3.00/kg rising to €3.16/kg for 2017, an increase of 5%. This reflects the strong manufacturing trade in key markets, especially the UK.
Live exports
The weanling trade has remained steady, with prices on a par with 2016.
Turkey has been the big success story for 2017 for Irish weanlings and stores. Irish exporters will have shipped more than 25,000 cattle to Turkey in 2017, up from 13,000 in 2016.
Based on most recent figures, Ireland is on track to have exported more than 180,000 cattle in 2017, the highest since 2014. Up to 2 December, exports were up almost 46,000 or 32% when compared with 2016.
The Netherlands, Belgium and Spain also saw huge increases in calf imports from Ireland and the outlook remains positive. This is very important in underpinning future beef price. The work of Bord Bia and the IFA in this area has to be commended.
While the live export trade looks positive and beef markets stable, we cannot ignore the threats from Brexit, Mercursor and global markets.
Irish beef farmers have demonstrated resilience in recent years and have shown a commitment to the sector but no one can wonder that they are questioning their future at current margins.
A mixed year for tillage farmers
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