The surge in cattle prices across the different regions of the UK has continued this week, with quotes reported from Scotland at £3.60/kg for R grade steers, the equivalent of €4.04/kg excluding VAT. This is 10p/kg more than was being offered last week. The base quote for Northern Irish steers and heifers at the start of the week was £3.42/kg (€3.84/kg ex VAT) for the U-3 grade, though £3.50/kg (€3.93/kg ex VAT) for the U-3 grade was widely available on Wednesday afternoon. In a fast-rising market, base quotes are a starting point for negotiation, especially where sellers have numbers to offer that are in spec for all the top customers. The Irish Farmers Journal heard from one farmer in this position who was offered £3.55/kg, the equivalent of €4.04/kg, excluding VAT.

Irish ABG quotes have also been moving up, but there is a big spread in what is being offered. Some factories have tried to buy cattle at €3.55/kg this week but most farmers are managing to secure €3.60/kg and €3.65/kg for heifers.

Reported prices

All prices paid for cattle in factories processing over 20,000 cattle annually in the EU and UK are reported to the EU where an average price is published for each country on a weekly basis. The reported price is an average of everything between the top and bottom prices paid and includes any extras such as an Angus bonus. In Scotland, for example, this can apply to up to 20% of the kill and therefore the reported price average is often higher than what a farmer with commercial cattle can negotiate.

Comparison

To allow comparison as far as possible between countries, we are comparing the R3 steer in Republic of Ireland, Northern Ireland and Britain and R3 young bulls in other EU countries and the EU average, all excluding VAT. Figure 1 shows that for the week ending 23 May, the Irish R3 steer price was reported at €3.59/kg compared with the equivalent of €3.85/kg in Northern Ireland and €3.85/kg in Britain.

Britain and Northern Ireland are the outliers in a surging market because when the Irish R3 steer is compared with the EU average, it is actually 8c/kg higher at €3.55/kg compared with €3.42/kg (week ending 16 May).

The Bord Bia prime Irish composite price which includes all prime beef cattle, is also ahead of the prime export benchmark, which is the average price paid for prime cattle in countries to which Ireland exports beef, at €3.48/kg compared with €3.44/kg.

Comment

The price of cattle and beef in general is driven by supermarket trade in the UK at present though this is expected to reduce somewhat as burger chains reopen in coming weeks.

Seven of the top 10 of these carry exclusively UK beef, though the largest three – Tesco, Sainsbury’s and Asda – who have half the market between them, also stock some Irish beef. AHDB surveys have revealed the level of Irish beef to be typically around 10% in the case of Tesco and Sainsbury’s and up to 30% with Asda.

With the restaurant and hospitality sector closed, retailers went on steak meat promotions, using Irish as well as British beef. However, this caused a protest by the National Farmers Union for not supporting exclusively British beef in the last week of April.

Since then, supermarkets are focusing as much as possible in securing British beef and the consequent demand is driving price upwards.

Irish prices have also improved, though at nowhere near the same pace. This reflects a reduced share of the UK market with the closure of fast food outlets, restaurants and hospitality outlets for Irish beef, a trend also applicable in the rest of Europe as all countries focus on their own product for retail markets.