Price stampede feared as beef market braces for 80,000 extra cattle in 2016

Reports from last week’s Bord Bia Meat Prospects seminar indicate mixed prospects for each sector

A good year for grass led to beef cattle finishing younger in 2015.

However, the annual supply to processors was still 5%, or 82,600 head behind 2014 — despite average carcass weights increasing by 5kg in 2015.

The under-supply helped to boost the R3 steer price paid to farmers 7.8%, compared to 2014 (€3.99 versus €3.70c/kg).

The Irish R3 steer price was 7.2% above the continental EU average, but 17% (82c) below the average UK price.

At last week’s Bord Bia Meat Prospects Seminar, Joe Burke of Bord Bia explained how the numbers will change again this year, bringing much changed market prospects.

He said there are likely to be 50,000 to 80,000 additional finished cattle available in 2016, and 2015 live cattle exports falling 25% is one of the reasons.

Live cattle exports to Belgium and Libya fell by 97% in 2015 compared to 2014.

Exports to Great Britain also fell by 49%. Exports to the Netherlands increased by 14% in 2015, and 60% to France.

Exports of weanlings and stores fell by 43% or 43,240 head in 2015, while 85,546 fewer calves and 48,735 fewer adult cattle were exported in 2015.

Further adding to cattle numbers in the pipeline are calf registrations up 5.7%, or 119,000 head, in 2015.

Dairy cow calvings increased by 99,000, while suckler calf registrations increased by 20,000 head.

There have been 19.1% and 19.9% increases in calf registrations, for the early maturing Aberdeen Angus and Hereford sire breeds.

Farmers and exporters will hope some of their extra cattle will find new markets in the US.

Brendan Gleeson, assistant secretary general of the Department of Agriculture, confirmed at the Meat Prospects Seminar that Irish beef exports to the US in 2015 were worth about €11m — falling significantly short of the €50 to €100m value that Minister for Agriculture Simon Coveney predicted was possible in the first year, when he launched Irish beef on the US market.

However, about 80% of beef consumed in the US is minced, and Gleeson said breaking into this grinding or manufacturing beef market is the next step in increasing exports to the USA.

EU beef exports of primal beef cuts are expected to commence to Canada shortly.

Mr Gleeson confirmed that China, Israel, Egypt and Saudi Arabia will be carrying out beef inspection visits from January to April of this year, which could results in Irish beef exports to these countries.

Beef and sheep meat access negotiations with Korea, Vietnam, Thailand and Mexico are also planned for 2016.

Mark Zieg of Bord Bia said a fall in EU-28 beef consumption of 0.2% is forecast for 2016.

Beef consumption increased in Germany by 2.1% in 2015, and German beef imports are expected to grow in 2016.

Beef exports from France and Italy are forecast to increase marginally in 2016, exports from Poland are forecast to increase significantly.

Overall, EU beef imports are forecast to increase by 2% in 2016, with exports to grow by 3%.

Global beef production is forecast to increase by 1% in 2016 with increases in production in India (7%), the US (5%), and Brazil (4%).

Australian production is forecast to fall by 14%.

Global beef exports are forecast to increase by 3% in 2016, with Argentina to increase exports by 15% on 2015 levels.

Australian exports are forecast to fall 10% on 2015 levels.

Global beef imports in 2016 are forecast to increase by 2%.

The industry will hope for a repeat of 2015’s Irish beef exports value increase by 5%, to €2.4bn, achieved despite an export tonnage reduction (the 503,000 tonnes of carcass weight equivalent was down 4% from the previous year).

The percentage of Irish beef exports going to the UK increased by an estimated 3% in 2015, to 54% of Irish exports.

Irish beef exports to most other export destinations fell in 2015, with the exception of Belgium (up 29%) and the UK.

Following falls in EU-28 beef consumption from 2011 to 2013, consumption is estimated to have increased by 1.2% in 2015, with the growth coming in new member states.

Sheepmeat

At the Meat Prospects Seminar, Declan Fennell of Bord Bia said: “Despite a challenging global environment, the Irish sheep sector delivered a solid performance in 2015”.

Average carcass weight rose 2.5% to 20.1kg, average price also increased by 2.5% to 4.83/kg, export volumes increased by 3% to 46,700 tonnes, and the value of exports also increased by 6%, to €231m.

In 2015, 77,000 more spring lambs were slaughtered. Exports to the UK and Belgium increased by 26% and 23%. Irish sheep meat exports to France fell by 14%.

Mr Fennell also said that New Zealand filled 77% of their EU trading quota in 2015.

He predicts another positive year ahead for the Irish sheep sector, helped by continued tight supplies in New Zealand, and increasing market access in higher value markets.

Pigmeat

Peter Duggan of Bord Bia said Irish pig supplies were 5% higher in 2015.

The tonnage of pig production was 9% higher at 276,000 tonnes, with carcase weights increasing by 4%.

Mr Duggan said the Irish breeding herd will decline in 2016, but this will be offset by some further advancement in productivity levels.

Although pig prices moved downwards during 2015, Irish prices averaged 3% above the EU average.

Irish exports to China in 2015 increased an estimated 41% compared to 2014, this was due to a 23% drop in the Chinese sow herd since 2013.

Exports to Australia also grew, by 200%, while exports to Japan fell by 75% in 2015.

While Russia is getting closer to becoming self-sufficient, Asia and Mexico are increasingly reliant on imports.

Poultry

The EU broiler price was 2% lower in 2015 due to increased global supply and increased eastern European production, Peter Duggan told the Bord Bia Meat Prospects Seminar.

EU poultry production has increased year-on-year, and a further increase of 0.7% is forecast for 2016. EU consumption is also forecast to rise.

Mr Duggan said Irish consumers are buying the poultry category more frequently. He said: “A better balanced global market should support industry prospects for 2016”.


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