Beef price update: cow kill rising as dairy herd expansion continues

The 2018 cow kill is running 21,161 head above the corresponding period in 2017. Drought conditions earlier this year were the catalyst for over 10,000 head of this additional throughput with the kill in recent weeks running about 1,000 head on average over corresponding 2017 levels.

If the higher throughput persists until the end of the year, the cow kill will have increased by over 70,000 head since 2015. There are a number of factors contributing to the higher cow kill. As mentioned already, drought was a factor of higher throughput in 2018 while the suckler herd has shrunk by over 23,000 head in the last three years. A major contributing factor is one that is often overlooked – rapid expansion in the dairy herd.

The dairy herd increased by in the region of 300,000 cows in the last five years. Taking a replacement rate of 20% would be responsible for an extra 60,000 head in throughput. Expansion in the dairy herd is expected to continue with Teagasc predicting the national dairy herd to reach 1.6m head by 2020. If this materialises, then it is likely that cow throughput will continue on an upward trajectory.

Steady trade

Meanwhile, the beef trade remains steady. P+3 grading cows range from €2.95/kg to €3.05/kg with fleshed O-grading Friesians ranging anywhere from €3.00/kg to €3.15/kg, while coloured or continental cross cows remain capable of securing a 5c/kg to 10c/kg higher price. R-grading cows range from €3.35/kg to €3.45/kg with heavy R- and U-grading cows attracting a price premium of 5c/kg to 10c/kg in plants specialising in the cow trade.

The majority of steers and heifers are trading on a base of €3.75/kg and €3.85/kg respectively. There are deals being completed for 5c/kg higher but these remain largely restricted to producers with greater negotiating power or significant numbers on hand.