The wider reopening of food service continues to drive strong demand in the beef trade, but supermarket business is proving more difficult because of price increases.
The demand for manufacturing beef used in burgers and mince is especially positive and this factor has underpinned the high beef prices across Europe.
However, higher prices are proving challenging with consumers facing cost of living increases across the board. This has led some of Ireland’s European customers switching to other proteins such as pigmeat and poultry, which are less expensive than beef.
\ Philip Doyle
In Britain it is a similar picture, with beef demand across the retail and food service channels remaining strong and no increase in supplies yet evident. Retail beef sales declined by 6% in 2021 but are still 4% ahead of pre-COVID-19 levels. Most recently, UK R3 steer prices were equivalent to €4.97/kg (excl VAT), which is an increase of 55% over the same week last year.
Rising prices
The beef market has performed very strongly so far in 2022. Last week the Irish R3 steer price was 81c/kg or 21% higher than during the same week in 2021, while heifer prices were also up 21% on last year (80c/kg). EU prices have also increased, with average male prices throughout the EU up 29% on last year’s levels.
Beef supplies are particularly tight in northern European markets such as Germany, Poland and the Netherlands and this has seen prices for R3 young bulls in those markets reaching €5.38/kg, €4.39/kg and €4.98/kg respectively (excluding VAT) for the week ended February 27. This was reflected in the Bord Bia EU prime benchmark price, which rose to €4.57/kg last week, compared to an average value of €4.01/kg for the full year 2021.
More cattle
Cattle throughput in factories has totaled 319,127 head during the first nine weeks of 2022. This is a 10% increase from the corresponding period in 2021 when 290,214 cattle were processed and takes cattle throughput back up to 2020 levels. The level of throughput recorded during 2022 to date has been higher than expected, with more producers opting to finish cattle in the house than had been foreseen. A strong increase in the cow kill to 66,469 head (+17%) has also contributed to the higher than expected cattle kill in the first two months of the year.
Lower carcase weights
Some of this increase in cattle throughput, however, will be offset by lower carcase weights. The average steer carcase weight in February this year was 344kg, back 5kg from February 2021, while the average heifer carcase weight was 310kg, back 4kg from February 2021 levels. Meanwhile, the average cow carcase weight was back by 11kg to 299kg while the mature bull carcase weight was back by 22kg to 425kg in January 2021. The only category which recorded an increase in the average carcase weight was young bulls, up by 2kg to 378kg.
Forecast kill
The latest available cattle population statistics indicate an increase in the number of slaughter age cattle on Irish farms. In December 2021 there were 72,857 additional cattle aged between 18 and 24 months for beef production (beef-sired and dairy males) on farms, which represented a 7% increase in cattle availability in this age group when compared to the same time last year. The additional cattle in this age range, combined with lower levels of cattle exports to Northern Ireland, has meant higher supplies of cattle for slaughter in the early months of 2022. As you move into the lower age categories of cattle on farm, however, the numbers are broadly similar to previous years.
Initial forecasts for 2022 indicated a recovery in total cattle slaughterings for the year in the region of 70,000 to 80,000 head. However, with ongoing cost pressures at farm level, the overall cattle kill is likely to increase in the region of 90,000 head.
Decisions made at individual farm level to counteract rising input and production costs will be key drivers behind this revised figure. There is now an increased likelihood of higher than anticipated cow slaughterings during 2022 and also the prospect of prime cattle being killed younger and lighter than in previous years.
Outlook
With European beef supplies forecast to remain tight for the year (-1.4%) and UK supplies also forecast only to increase marginally (+1%), we can expect a firm demand for Irish beef in our main markets. Consumer demand will be kept in check by price inflation: in Britain there is an expectation of further retail sales decline in 2022 as price increases become evident, while the food service channel is expected to recover as the year progresses.
The impact of the invasion of Ukraine can be expected to affect the beef market situation, driving production costs and prices higher and potentially having a dampening effect on consumption. A further factor is potential herd reductions throughout Europe, as farmers seek to reduce their exposure to high costs and to manage feed cost and availability resulting from the crisis. The shape of this potential development remains to be seen over the coming weeks and months.
Live exports update
The live cattle export trade has started 2022 firmly, with 47,600 animals leaving the country up to the end of February 2022. This is an 11% increase from the 42,801 cattle exported in the corresponding period in 2021 and is similar to the level of export recorded in the same period in both 2019 and 2020.
There has been a year-on-year improvement in calf exports in particular, with 31,762 calves exported this year to date. This is notably higher than the 27,003 calves exported in the first nine weeks of 2021.
It is worth noting that the 2021 calf export season had a particularly challenging start, with unsettled weather last February negatively affecting the trading of calves to the continent.
While there has been one week this year to date in which no calves were exported, the level of disruption has been much lower, with the current level of export in 2022 representing a return to a more typical trading pattern.
Live exports of other categories of cattle have totalled 15,838 head during the first nine weeks of 2022, similar to the levels recorded in the same period in both 2020 and 2021. There has, however, been a shift in the destinations with cattle exports to Northern Ireland totalling just 7,584 head compared to almost 11,000 head in the same period in 2021. This decline, however, has been offset by the large consignment of Friesian bulls exported to Libya in the early weeks of the year. Exports of older cattle to other markets have largely been similar to previous years.
Outlook
Higher veal and beef prices in the EU, tighter cattle supplies and improved demand from food service have all contributed to a steady demand for Irish calves in key export destinations. However, while demand is relatively good, increases in the cost of milk replacers, compound feeds and other input costs have all affected the prices customers are willing to pay for calves. Similar factors have affected the prices available and thus the demand for older categories of livestock in many of our key export markets.
Despite challenging market conditions, the outlook for live cattle exports is relatively positive. Northern Ireland has been the stand out market for exports of older cattle in recent years. Exports to the market got off to a slow start this year, however demand has picked up in recent weeks, with the latest reports indicating strong demand for cattle from northern processors coupled with tighter cattle supplies, particularly in the shorter term.
Using St Patrick’s Day to promote Irish beef
Throughout March, Bord Bia will leverage the global phenomena of St Patrick’s Day through targeted trade engagements and promotional campaigns across 14 countries, to bring Irish produce front and centre. We outline a selection of the activities taking place to promote Irish beef:
In the UK, Irish produce will be showcased to over 30,000 people at the Lord Mayor of London’s official St Patrick’s Day event at Trafalgar Square. Irish beef ambassador, chef and TV personality, Anna Haugh will serve a menu of Irish beef and seafood at Bord Bia’s Irish-themed pop-up food site.
In the Netherlands, chef Eric van Loo, member of Bord Bia’s Chef’s Irish Beef Club will prepare a St Patrick’s Day menu, featuring Irish beef, at his two Michelin star restaurant, Parkheuvel, in Rotterdam on 15 March.
In Germany, leading supermarket Edeka will hold an Irish beef promotion across 2,000 Edeka stores in the Nordbayern region with in-store magazine advertising and promotional videos at the butcher counter. A two-week promotion of Irish beef will also run across the entire Netto network of 4,000 stores, while online German retailer Gourmetfleisch.de will host a promotion of Irish beef throughout March, featuring a barbecue prize, social media posts, and website advertising.Farm Sustainability Learning Hub
Bord Bia’s Farm Sustainability Learning Hub was launched last October, to support farmers in adopting sustainable practices on-farm. All modules are freely available to members of the Sustainable Assurance Schemes for beef, lamb, dairy, pigmeat and horticulture.
Two new modules on water quality and soil health will launch in the coming weeks. A module developed by SEAI on energy efficiency in agriculture was added earlier this year. The number of modules will continue to grow over time, with a module on animal welfare currently in development. Beef, sheep and dairy farmers can enrol online at farm.bordbia.ie. All modules are optional.
The wider reopening of food service continues to drive strong demand in the beef trade, but supermarket business is proving more difficult because of price increases.
The demand for manufacturing beef used in burgers and mince is especially positive and this factor has underpinned the high beef prices across Europe.
However, higher prices are proving challenging with consumers facing cost of living increases across the board. This has led some of Ireland’s European customers switching to other proteins such as pigmeat and poultry, which are less expensive than beef.
\ Philip Doyle
In Britain it is a similar picture, with beef demand across the retail and food service channels remaining strong and no increase in supplies yet evident. Retail beef sales declined by 6% in 2021 but are still 4% ahead of pre-COVID-19 levels. Most recently, UK R3 steer prices were equivalent to €4.97/kg (excl VAT), which is an increase of 55% over the same week last year.
Rising prices
The beef market has performed very strongly so far in 2022. Last week the Irish R3 steer price was 81c/kg or 21% higher than during the same week in 2021, while heifer prices were also up 21% on last year (80c/kg). EU prices have also increased, with average male prices throughout the EU up 29% on last year’s levels.
Beef supplies are particularly tight in northern European markets such as Germany, Poland and the Netherlands and this has seen prices for R3 young bulls in those markets reaching €5.38/kg, €4.39/kg and €4.98/kg respectively (excluding VAT) for the week ended February 27. This was reflected in the Bord Bia EU prime benchmark price, which rose to €4.57/kg last week, compared to an average value of €4.01/kg for the full year 2021.
More cattle
Cattle throughput in factories has totaled 319,127 head during the first nine weeks of 2022. This is a 10% increase from the corresponding period in 2021 when 290,214 cattle were processed and takes cattle throughput back up to 2020 levels. The level of throughput recorded during 2022 to date has been higher than expected, with more producers opting to finish cattle in the house than had been foreseen. A strong increase in the cow kill to 66,469 head (+17%) has also contributed to the higher than expected cattle kill in the first two months of the year.
Lower carcase weights
Some of this increase in cattle throughput, however, will be offset by lower carcase weights. The average steer carcase weight in February this year was 344kg, back 5kg from February 2021, while the average heifer carcase weight was 310kg, back 4kg from February 2021 levels. Meanwhile, the average cow carcase weight was back by 11kg to 299kg while the mature bull carcase weight was back by 22kg to 425kg in January 2021. The only category which recorded an increase in the average carcase weight was young bulls, up by 2kg to 378kg.
Forecast kill
The latest available cattle population statistics indicate an increase in the number of slaughter age cattle on Irish farms. In December 2021 there were 72,857 additional cattle aged between 18 and 24 months for beef production (beef-sired and dairy males) on farms, which represented a 7% increase in cattle availability in this age group when compared to the same time last year. The additional cattle in this age range, combined with lower levels of cattle exports to Northern Ireland, has meant higher supplies of cattle for slaughter in the early months of 2022. As you move into the lower age categories of cattle on farm, however, the numbers are broadly similar to previous years.
Initial forecasts for 2022 indicated a recovery in total cattle slaughterings for the year in the region of 70,000 to 80,000 head. However, with ongoing cost pressures at farm level, the overall cattle kill is likely to increase in the region of 90,000 head.
Decisions made at individual farm level to counteract rising input and production costs will be key drivers behind this revised figure. There is now an increased likelihood of higher than anticipated cow slaughterings during 2022 and also the prospect of prime cattle being killed younger and lighter than in previous years.
Outlook
With European beef supplies forecast to remain tight for the year (-1.4%) and UK supplies also forecast only to increase marginally (+1%), we can expect a firm demand for Irish beef in our main markets. Consumer demand will be kept in check by price inflation: in Britain there is an expectation of further retail sales decline in 2022 as price increases become evident, while the food service channel is expected to recover as the year progresses.
The impact of the invasion of Ukraine can be expected to affect the beef market situation, driving production costs and prices higher and potentially having a dampening effect on consumption. A further factor is potential herd reductions throughout Europe, as farmers seek to reduce their exposure to high costs and to manage feed cost and availability resulting from the crisis. The shape of this potential development remains to be seen over the coming weeks and months.
Live exports update
The live cattle export trade has started 2022 firmly, with 47,600 animals leaving the country up to the end of February 2022. This is an 11% increase from the 42,801 cattle exported in the corresponding period in 2021 and is similar to the level of export recorded in the same period in both 2019 and 2020.
There has been a year-on-year improvement in calf exports in particular, with 31,762 calves exported this year to date. This is notably higher than the 27,003 calves exported in the first nine weeks of 2021.
It is worth noting that the 2021 calf export season had a particularly challenging start, with unsettled weather last February negatively affecting the trading of calves to the continent.
While there has been one week this year to date in which no calves were exported, the level of disruption has been much lower, with the current level of export in 2022 representing a return to a more typical trading pattern.
Live exports of other categories of cattle have totalled 15,838 head during the first nine weeks of 2022, similar to the levels recorded in the same period in both 2020 and 2021. There has, however, been a shift in the destinations with cattle exports to Northern Ireland totalling just 7,584 head compared to almost 11,000 head in the same period in 2021. This decline, however, has been offset by the large consignment of Friesian bulls exported to Libya in the early weeks of the year. Exports of older cattle to other markets have largely been similar to previous years.
Outlook
Higher veal and beef prices in the EU, tighter cattle supplies and improved demand from food service have all contributed to a steady demand for Irish calves in key export destinations. However, while demand is relatively good, increases in the cost of milk replacers, compound feeds and other input costs have all affected the prices customers are willing to pay for calves. Similar factors have affected the prices available and thus the demand for older categories of livestock in many of our key export markets.
Despite challenging market conditions, the outlook for live cattle exports is relatively positive. Northern Ireland has been the stand out market for exports of older cattle in recent years. Exports to the market got off to a slow start this year, however demand has picked up in recent weeks, with the latest reports indicating strong demand for cattle from northern processors coupled with tighter cattle supplies, particularly in the shorter term.
Using St Patrick’s Day to promote Irish beef
Throughout March, Bord Bia will leverage the global phenomena of St Patrick’s Day through targeted trade engagements and promotional campaigns across 14 countries, to bring Irish produce front and centre. We outline a selection of the activities taking place to promote Irish beef:
In the UK, Irish produce will be showcased to over 30,000 people at the Lord Mayor of London’s official St Patrick’s Day event at Trafalgar Square. Irish beef ambassador, chef and TV personality, Anna Haugh will serve a menu of Irish beef and seafood at Bord Bia’s Irish-themed pop-up food site.
In the Netherlands, chef Eric van Loo, member of Bord Bia’s Chef’s Irish Beef Club will prepare a St Patrick’s Day menu, featuring Irish beef, at his two Michelin star restaurant, Parkheuvel, in Rotterdam on 15 March.
In Germany, leading supermarket Edeka will hold an Irish beef promotion across 2,000 Edeka stores in the Nordbayern region with in-store magazine advertising and promotional videos at the butcher counter. A two-week promotion of Irish beef will also run across the entire Netto network of 4,000 stores, while online German retailer Gourmetfleisch.de will host a promotion of Irish beef throughout March, featuring a barbecue prize, social media posts, and website advertising.Farm Sustainability Learning Hub
Bord Bia’s Farm Sustainability Learning Hub was launched last October, to support farmers in adopting sustainable practices on-farm. All modules are freely available to members of the Sustainable Assurance Schemes for beef, lamb, dairy, pigmeat and horticulture.
Two new modules on water quality and soil health will launch in the coming weeks. A module developed by SEAI on energy efficiency in agriculture was added earlier this year. The number of modules will continue to grow over time, with a module on animal welfare currently in development. Beef, sheep and dairy farmers can enrol online at farm.bordbia.ie. All modules are optional.
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