The sharp fall in the sterling exchange rate, following the British referendum on EU membership, had immediate effect on livestock prices for Irish farmers.
Because of the reliance on the British market for about half of Ireland’s beef exports, there was beef price uncertainty in the air as soon as the value of sterling against the Euro plummeted, when the referendum outcome shock filtered through on Friday morning.
Speculation on the extent of the impact for the beef price raged over the week-end, as cattle farmers nervously awaited the weekly beef price quotes on Monday.
The outcome was a heavy blow, with cuts in both bull and cow prices, and another slice off the returns for prime beef, although the latter possibly escaped the worst because of the current delicacy of the supply-demand balance.
Steer and heifer prices have eased by 5 cents/kg, with the base for steers quoted at 400 cents/kg, and for heifers at 410 cents/kg.
Cattle farmers face toughnegotiations with processors to get paid above the base for steers this week, but there appears to be some wriggle room to negotiate deals for up to 5 cents/kg of a top-up on heifer prices.
Cow prices are back by 10 cents/kg, with the base for P-grade at around 300 cents/kg, and O-grade ranging around 310 cents/kg, while the Rs are making 330 cents/kg, in general.
The decline in the cow price will concern prime beef finishers, as the build-up in supply is expected to strengthen over the coming weeks, and the trade moves closer to the autumn season.
However, if the worsening sterling exchange rate with the euro were to ease, that would relieve price pressure at the factories.
The intake last week showed further gains, edging closer to 32,000 head.
The young bull supply was strong at around 4,700 head, while the kill included over 8,000 cows.
The trade in Britain showed little change last week, on the back of tight supplies.
The average prices for R4L-grade steers and heifers was around Stg 333p/kg.
That was equivalent to around 440 cents/kg (if VAT is included, at last week’s exchange rate of 77p).
But that rate had shot up on Monday to over 83p (which would convert the 333p for R4L-grade steers and heifers to about 405c, with VAT included).
In France, the market remained unchanged, and continued to be underpinned by strong supplies of domestic product and continuing difficulties getting imported product into retailers.
In Italy, the beef market remained slow on the back of reduced consumption, a trend also evident across other European markets.
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