Beef price had to rise in England

At the start of the year, the price paid for U3 grading steers in NI was just over 526p/kg.

Back then, no-one could have predicted that three months later, prices would be up nearly 160p/kg, which on a 400kg steer is an extra £640 per head. It is an incredible turn in the market, with 700p/kg a realistic possibility in the next couple of weeks.

There have been various theories put forward as to why beef prices are up so much in such a short period of time.

One issue is definitely the cost of eating out, with restaurants having to pass on wage and energy inflation to customers, meaning that a meal out for a family of four will now easily surpass the £100 mark.

At those prices, many have decided to cook and entertain at home, so supermarket sales for the likes of beef have been robust.

Whatever we might think about the power of supermarkets, they are loyal customers of our beef – it is the restaurant and foodservice trade that tends to offer cheaper, imported beef from various parts of the world.

When those robust supermarket sales are combined with relatively tight cattle numbers across Europe, it has left demand ahead of supply and ultimately prices going up.

Sustained

But perhaps there is an even more fundamental reason why prices have increased so rapidly and why they might actually be at a level that can be sustained into the future.

To assess that, it is necessary to understand what has been happening in England over recent years. In 2021, government started a 7-year process to gradually reduce basic payment scheme (BPS) money going to farmers. By 2025, the maximum BPS any farmer will receive is just £7,200.

While some of this lost direct support can be recouped by participation in agri-environment type schemes, there is no doubt that direct payments to English farmers have taken a big hit.

With less income support, the market simply has to step up or farmers will cease production.