Bord Bia figures show that the price differential between an R4 steer in Ireland and Britain currently stands at a 12 year high.
The latest figures show the average R4 steer price paid in Britain to be the equivalent of €252 higher than is currently being paid by Irish processors. This figure is based on a carcase weight of 360kg.
Throughout the summer tight supplies of finished cattle combined with strong market demand has seen farm gate prices in Britain increase steadily to the equivalent of €4.55/kg. This strong trade has remained in place throughout the autumn and while Irish factories have reduced prices by 21c/kg over the past 12 weeks, British prices have increased marginally by 1.6c/kg.
Figure 1 charts the differential between the Irish and British R4 steer price from 2001 through to the start of October 2012. It shows how the prices paid by Irish factories since April have failed to keep pace with the British market, a market which traditionally consumes 50% of Irish beef exports.
The Bord Bia figures show the average differential between the Irish and British price during the 2001 to 2012 period was the equivalent of €88 per finished animal.
The disparity that now exists between farm gate prices in Ireland and those paid in our main export market raises serious question marks over the ability of Irish farmers to continue to produce beef on a year round basis.
Winter finishers are no longer in a position to compete with their British counterparts who are now receiving a 20% premium price premium. The issue is further compounded by the fact that the cost per kilo of gain on large scale feedlots in Britain can be up to 30% lower than during the housing period in Ireland due to widespread availability of low cost food by-products.
IFA National Livestock Chairman Henry Burns said the massive price gap, exposed by IFA, shows the factories were totally unjustified in pulling prices in August and September based on market returns. In addition, he said the figures show that cattle prices can increase significantly.
Source: Argentine Beef Packers S.A.
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