The price differential between factories for different classes of stock is probably the most glaring take home message from our annual factory beef price comparison by Phelim O’Neill this week (p24-27).

When you see up to €225 per head of a difference in the price paid for cows, it should make farmers sit up straight.

That’s more than the profit per head for most farmers. It shouldn’t come as a surprise that certain outlets have contracts that they need to fill, and hence the requirement to compete harder in the market to secure that meat.

It’s not China, or even Korea, but more likely the old reliable driver of market dynamics called ‘supply and demand’ that looks set to drive beef price into 2024.

More accurately, it is lower EU and UK supply, slightly lower consumption, and increased live export demand, that has tilted the market in favour of higher beef prices of late.

What could tilt this balance back is increased imports into the EU.

The meat marketing seminar organised by Bord Bia brought the food and farming sector together to hear the latest updates and predictions for 2024.

While the doors re-opening for Irish beef to China and Korea are welcome and made recent headlines, the likelihood is that both are set to be more a part of a long-term strategy play.

It will be a while before we see more money in Irish farmers’ pockets as a result.

EU set for falling numbers

The one line summary from the Bord Bia gathering is that tighter EU beef and sheep numbers are set to drive higher prices into 2024. Beef, sheep and pork output from the EU27 countries is predicted to fall by 1.3%, 1.2% and 1.5% respectively in 2024.

This of course opens up an opportunity for imports into the EU, and we must note the Australian sheep flock is the highest it has been in a decade.

Can more pork fill the gap? The short answer is no. EU pig production is falling off a cliff and this underpins the meat deficit.

The huge fall off in EU pork supply is led by the huge falls in key traditional pork producing countries such as the Netherlands (down 14%) and Denmark (down 19%).

This clearly shows the real impact environmental policy is having on key EU food producing countries.

EU pork export volumes in 2023 were down 20% compared to 2022, and the latest census shows the pig breeding herd is down a further 1.6%, so expect more of the same.

Closer to home, Irish pig prices increased 20% in 2023, but yet Irish pigmeat was down 11%. UK pork production is the lowest it has been in five years.

The Kantar statistics for 2023 suggest pork retail volumes are suffering badly, the worst of all the meats, down 5.8%.

Sheep flock

The Irish and EU sheep flock is also in decline, so it’s likely we will see growth in lamb imports into the EU market. The impact of competition from non-EU countries has already started with UK exports to the EU up 12%, and New Zealand exports up 7%.

So what’s the beef outlook? The experts suggest 2024 is expected to see a further fall (1.3%) in EU beef output. The fall was 3.6% in 2023.

Yes, consumption is also falling (down 3.6% in 2023), however, the slide in consumption is not expected to be as big as the slide in output.

Closer to home, cattle supply to Irish factories in 2024 is expected to be down another 2% (39,000 head) in addition to the 2% recorded for 2023. So there were less cattle sent to Irish factories and the quality of cattle sent was lower, with O and P grade cattle now 60% of the national production.

The fact that fat score 2 was up 8% since 2021 is probably more a reflection of the 2023 weather and grass year.

In terms of the market, it is clear the lower beef price paid to Irish farmers was a key part in UK imports of Irish beef jumping 10% in 2023.

The Bord Bia data shows that when the Irish price slid to 450 cents/kg in August, the UK equivalent price rose to 540 cents/kg, almost €1 / kg higher, which is €350 on a 350kg carcase. Whatever about the potential positive Italian respect for provenance of an Irish PGI mooted by Bord Bia, there is no denying the market’s love of a low price.