Data from the Central Statistics Office showed that milk production in Ireland in November last year hit the highest level on record for the month.

While the mild autumn helped, the biggest driver of milk production was the good prices which were being paid and the low cost of feed. Basically, it was profitable for dairy farmers to feed their cows in order to stretch the milking season as far as possible.

While there certainly are limits to how much this production can be pushed, dairy farmers are in a unique position in that they can increase production for periods without it significantly reducing the capacity for future production.

On the beef side of the equation, there have also been considerable price rises and farmers have reacted by, well, not increasing production very much. The very nature of the business, and the grades and ages required by factories means that in many cases holding on to cattle to get a better price is not an option, while sending cattle to the factory early is usually not an option as they will be a lower weight and so will get less per head despite the higher per kg prices.

For finishers, the problem is further exacerbated by the fact that the higher prices feed down through the production chain, with the cost of buying replacements eating into the profits made from selling the cattle to factories.

Suckler farmers, in theory will do well from these higher prices, but as numerous Teagasc farm income reports show, the income from the vast majority of such operations remains more reliant on CAP payments than it does on selling yearlings.

In fact, suckler cow numbers continue to fall – dropping by 50,000 in 2024 to the lowest level since the early 1990s – and the current level of cows being brought to factories suggest that high prices might actually be accelerating this trend, which in turn will further increase the scarcity of fresh stock to purchase in coming years.

Fundamentally, the high prices in beef have, to some extent, been driven by a shortage of supply, but the high prices may actually end up accelerating that supply crunch.

This means that the supply of new calves for the beef industry will increasingly be coming from the dairy sector. For dairy farmers, where calves after mostly a by-product of their main business, this is good news, but dairy farmers are unlikely to adjust their calving times to suit beef finishers.

Overall, this means that while high milk prices lead to higher supply, in the beef sector high prices may actually lead to reduced, or more seasonal, supply in future.