Beef market report: €1/kg price gap to UK leaves farmers unhappy

Beef prices at the factories have entered a freeze zone, haunting cattle farmers with their worst fears, that little has changed after their very difficult 2014.

Despite improved trade for beef in the UK, prices being quoted by Irish processors for this week are unchanged at best, and have weakened from the February average at several beef plants.

The base for steers is being quoted at 410 cents/kg in general this week, with a minority of cattle farmers reporting deals that deliver a few cents/kg more, as processors continue to effectively tighten the reins on prices, and kill the expectations of farmers who were optimistic for the spring trade.

The base for heifers has tightened to a premium of 5 cents/kg over steer prices at most of the factories, quoting 415 cents/kg, while 420 cents/kg is being paid at some plants, and a shade more is being negotiated for better quality heifers.

Overall prices have eased back by 5-8 cents/kg from the February trade, and processors are “conditioning” farmers by warning that prices could decline further, because of weak European markets for beef.

However, they are less inclined to talk about the UK market’s strength — where farmers are getting in excess of €1/kg more for their beef cattle than their Irish counterparts. The UK is the destination for nearly 50% of Irish beef exports.

The difference between Irish and UK prices is now at or above the point at which farmers staged their beef factory gate protests last October.

The supply of cattle to factories held strong at just over 32,000 head last week, which was slightly higher than the same week last year. As yet, there is no indication of the expected tightening in the cattle supply to factories.

There has been very little change in the cow trade this week. The base range for O/P-grade cows is 330-360 cents/kg, and up to 370 cents for the Rs.

In Britain, cattle prices have firmed, with R4L-grade steers averaging equivalent to 533 cent/kg (incliding VAT).

Trade is reported as remaining relatively static, with best demand for rumps and striploins.

In France, the market has shown little change week-on-week, with promotions last week centred on ribs, roasts, chucks and diced beef.

In Italy, demand for most cuts remained slow, with meat consumption back due to the season of Lent, while there has been an increase in competition, due particularly to the supply of competitively priced Polish product.