Increases during the second quarter of 2022 have transformed Irish beef prices from being among the worst to among the best in class, even nudging ahead of UK prices for the first time since 2011.

Unfortunately, rising input costs have taken the shine off rising market prices and the concern now as grass cattle start to come ready is will prices hold in the second half of the year.

Bord Bia forecasts an increase in slaughter of approximately 1.8m cattle for 2022, an increase of 108,000 head or 6% on 2021.

However, most of this increase for 2022 has already taken place as up to the first week of June the kill was just under 83,000 head or almost 12% higher than the same period in 2021. This has coincided with a period of record beef prices.

Made in Britain

Britain has always been Ireland’s most important beef export market and irrespective of ambitions to diversify after Brexit, it is as important than ever in 2021. Bord Bia data shows that between January and April this year, Ireland exported 60,431t of beef compared to 47,460t in the same period last year.

This is a massive 27% increase and it means Britain took most of the extra beef produced in Ireland because of the higher cattle kill.

Demand for Irish beef in Britain was further helped by the fact that their demand increased by 20% in the first four months of 2022 to 100,866t (AHDB).

Red meat analyst with AHDB Hannah Clarke explained to the Irish Farmers Journal that this was recovery from COVID-19 and Brexit disruption at start of 2021.

“Comparing back to Jan-Apr 2020, for example, 2022 volumes of fresh and frozen beef are 3% higher, and are 7% below that recorded for 2019.”

She also referred to increased beef sales through food service and that “as we know, imported beef enters this market”.

This additional demand was in part driven by the UK beef exports to the EU resuming as exporters became more familiar with Brexit border controls that came into effect at the beginning of 2021.

Interestingly, while Ireland is Britain’s most important beef supplier by a considerable distance, imports were up 73% from Netherlands to 5,839t, by 26% from Poland to 5,312t and by a massive four-fold increase on a low base to 5,042t from Germany.

Coincidentally, the German farmgate beef price exceeded €6/kg for a period and Poland and the Netherlands, which traditionally lagged far behind the Irish beef price, was considerably ahead of it for much of 2022.

EU markets

The EU was also a fertile market for Irish beef exports in the first four months of 2022.

While Irish output may have been higher, overall EU beef production was down by just under 1% in the first quarter of 2022 and in Germany, one of the EU’s largest beef producers, production was down 8% compared with last year.

Irish beef exports to the EU 27 were 72,481t (Bord Bia), a 13.4% increase on the same period last year.

The opportunity for Irish beef exports to the EU is helped by the fact that the EU market isn’t the target it once was for South American exporters and even the US and Canada with tariff-free quotas are small players.

In the first quarter of 2022, EU beef imports were down to 89,850t in the first quarter of 2022 compared with 104,000t in the same period last year. This is because China and other Asian markets are now priority for South American countries and the US.

Global picture

While the market in China has been disrupted because of a COVID-19 lockdown in the early months of 2022, it still remains the world’s largest beef importer.

Meat and Livestock Australia (MLA) data shows that China’s beef imports in the year ending 31 March 2022 were a healthy 2.2m tonnes and, despite restrictions, first-quarter imports were 510,341t in 2022, down 17% on the same period last year.

MLA figures show a 4% decline in Japanese beef imports by to 569,333t for the year ending 31 March 2022, while South Korea, the next-largest Asian importer, was 5% up in the year to the end of February.

The US is the world’s second-largest importer of beef after China and it posted the most spectacular growth so far in 2022.

Up to 11 June, USDA data shows the US imported 571,364t of beef, a 20% increase on the same period in 2021.

While Canada and Mexico are the main suppliers, the biggest growth has come from Brazil, which has supplied 77,031t in this period compared with 12,000t in the same period last year.

Irish exports to the US are low and have fallen further in 2022 to just 2,604t, a 24% decline on the same period last year.

With EU production down overall and the UK, a major net importer of beef, stable, market conditions have been perfect in 2022 for Irish exporters.

It has taken a while for full value to find its way back to farmers but there is no denying that it has in recent weeks.

Globally, Asian markets and the US have been strong enough to absorb supplies from major global exporters. Both the top two exporters, Brazil and the US have increased exports without growing their exports to the EU.

With the increased-on farm production costs, it is essential to hold the value gained over recent months.

The second half of the year is usually more challenging but the big increase in cattle numbers is already through the system for this year.

In the longer term, the performance of the global economy remains a concern as does the opening of UK markets to Australia and New Zealand.

However, the FAO outlook for 2030 suggests that global demand for beef will grow by a further 4.5m tonnes so there will be opportunities for Irish beef exports as well as threats.