Irish farmers look with envy at a British beef price that was €1.13/kg better than the Irish price for the same R3 steer for week ending 10 October 2024.

At such a price point, we might expect that UK beef producers and suckler farmers would be looking to expand production.

However, despite the positive market signals, the opposite is the case - UK farmers are in retreat and cow numbers are in decline.

The latest data from the Agriculture and Horticulture Development Board (AHDB) for England on 1 June puts this decline at 32,000 head or 5.1% for suckler cows, with a smaller decline of 0.6% in the dairy herd bringing the total breeding herd down to 1.675 million head compared with 1.714 million a year earlier.

The overall cattle herd fell 2% to 4.98 million, the lowest total ever recorded in England in the June survey. If a beef price the equivalent of €6.18/kg doesn’t stimulate production, what will?

EU picture

It isn’t just England where cows - sucklers in particular - are a problem.

Looking at the EU overall, beef production actually increased in the first half of the year, thanks to a 9% increase in Italy and a 20% increase in Poland.

The EU outlook released last month sees this as an anomaly, due to tighter grazing conditions in central Europe and particularly strong demand from Turkey.

Its overall forecast for 2024 is that production will be down by 0.5% and decline by a further 1% next year.

Total beef production in the EU for 2025 is forecast at 6.365m tonnes carcase weight equivalent, which is almost 600,000t less than it was in 2019.

The trend is similar in Ireland. Animal identification and movement data at 1 June showed that suckler cow numbers had fallen by 46,543 over the previous 12 months to 810,00 head and calf registrations for the first half of the year were down 39,202 head.

The dairy cow herd, which had been expanding, has also stalled, with numbers down 22,485 compared with a year earlier.

Policy impact

It will be little surprise that Irish cattle numbers are coming under pressure, as the structure of support payments are designed to incentivise everything but production.

Money has been siphoned off the CAP payments to enhance funding for eco schemes and attractive support payments have succeeded in encouraging the expansion of organic farming, particularly in the livestock sectors.

Of course, the CAP applies across the EU, where the target is to get 25% of the land into organic production.

In England, environmental schemes have replaced the CAP post-Brexit and the effect has been to dramatically reduce support for livestock farming, particularly in the more upland regions.

Less factories required

All of this is bad news for beef factories that need cattle supply for their raw material.

A typical Irish factory operates at its most efficient with an annual throughput in the region of 80,000 to 100,000 head and probably needs a throughput of at least 50,000 head to be viable.

If we look at the decline in Irish cow numbers of almost 69,000 in the year to June 2023, we can quickly see that those numbers for one year are the potential supply for one Irish factory.

As the Irish Farmers Journal/KPMG report highlighted, the impact of falling cattle numbers is felt well beyond the farm gate.

On the upside, it makes achieving the reduction in emissions from agriculture target more likely, but, of course, such an accomplishment comes at a price.