With data from the Department of Agriculture showing factory slaughterings running 11pc ahead of this time last year at 475,114, there’s questions whether the run of exceptionally strong weekly kills can be maintained.
To this end, Bord Bia’s Mark Zieg provided a detailed reply on the state of supplies and the market when asked by the Farming Independent how Bord Bia sees the trade developing throughout the rest of the year
“The strong market is based on tight supplies of beef around Europe and in the wider global market also,” he said. “After a drop in European cattle supplies of -1.4pc last year, EU forecasts suggest a further drop of 0.8pc this year. And while supplies in the UK are forecast to increase by one per cent, this follows a decrease of almost five per cent in 2021.
“In Europe, we see production decrease forecasts in many countries that are significant producers and consumers of beef: Sweden -4pc, Spain -4pc, Italy -2pc, France -1pc. Meanwhile, beef consumption has been strong and is forecast to remain steady for the year.”
Bord Bia predicted an increase of 87,000 in slaughterings at the start of the year, but with 46,681 of that number already accounted for and reduced slaughterings abroad, are we looking at a shortage of beef later in the year?
Mr Zieg said that there was uncertainty in relation to how the market may develop.
“The uncertainty, both on the production and consumption fronts, arises from cost inflation,” he said. “On the production side, we can already see the impact in an increase of 21pc or 17,034 head in the Irish cow kill. It would not be unreasonable to predict that farmers will continue to cull unproductive animals as much as possible and avail of the high prices on offer.
“While we have been working well through the forecasted increase in supplies, there is a question if we will see additional cullings later in the year, not just here in Ireland, but around Europe.
“While this would reduce the supply scarcity, it could also meet with a reduced demand from cash-strapped consumers, who may react to inflation in household costs by reducing their overall food spend and as a result their beef consumption, especially when faced with higher retail prices.”
Mr Zieg said cost inflation of around seven per cent had already seen a decrease in beef sales in Britain and Germany of between 13-17pc. However, he also noted the outlook on the food services side remained positive, with more consumers dining out.
Meanwhile, factory base quotes for both bullocks and heifers stayed largely unchanged last week. This sees the general run of quotes for bullocks around the €4.80/kg mark, with €4.85-4.90/kg reported where numbers and demand coincide.
On the heifer side, €4.85-4.90/kg is what appears to be available, although some southern plants were pitching at €4.80/kg, citing a more plentiful supply due to the short week.