October 11, 2004

Beef Price Disparity Aids British Returns
 

Beef producers in Britain are benefiting by up to 3p/lb in higher returns for cattle as a result of a widening of the difference between UK and Irish prices for similar grade cattle.

Comparison of the price being paid for R3 bullocks in Britain and similar grade cattle in Irish factories for the last week in September 2004, as well as the corresponding week in 2003 show the margin between the two prices has widened by 3p/lb after both prices were converted to IR/p/lb and adjusted for VAT.

Prices in both countries have shown a similar downward trend for September. But British suppliers continued to receive 12p/lb more for cattle than their Irish counterparts in 2004, compared with a difference of 9p/lb between the prices paid in both countries for September 2003.

Prices in both markets have been falling at a rate of around 1p/lb/week, but the reduction in the British price continues to come off a higher base. For the week ending September 27 2004, beef producers in Britain were paid 103p/lb for R3 bullocks compared to just over 91p/lb paid by Irish processors for the same grade animals.

The wider difference between Irish and British prices reduced during August, but has remained constant through September with the trend in both countries closely tracking each other.

Nearly half of Irish beef exports are being sold into the British market, with a high percentage going directly to the supermarket trade. Producers are feeling the effect of the lower prices in Ireland and questioning the price advantage for Irish processors, which has increased by one-third compared to Autumn 2003.