Beef prices hold firm as sterling weakens

STRONG demand for meat and tight global supplies is insulating domestic beef prices from volatility on currency markets.

Sterling dropped against the euro in the wake of the UK election, with the exchange rate moving from 87p to the euro last week to 88.5p yesterday.

However, the fall in the value of sterling has not had an immediate impact on beef prices.

Factory quotes for both heifers and steers have generally held this week as processors compete for cattle to fill orders. Steers were making €4.15-4.20/ kg yesterday, with heifer quotes ranging from €4.25/kg up to €4.30/kg in cases. Plain P grade cows are on €3.10-3.15, with O grades making €3.40-3.50/kg.

IFA national livestock chairman Angus Woods said steady beef prices were being driven by “extremely strong market demand and rising prices” in Britain.

“UK prices have risen each week for the last 10 weeks in a row by over 16c/kg. These price increases, which are continuing strongly, outweigh any change in the sterling exchange rate,” Mr Woods said.

“Beef demand across all other markets is also very strong and there is not an ounce in store anywhere,” he claimed.

However, Meat Industry Ireland (MII) director, Cormac Healy, cautioned that the outcome of the UK general election had “piled on further uncertainty as evidenced by the reaction of the currency markets”.

“Sterling at 88p to the euro or even 90p, as some commentators have suggested, places major competitive pressures on Irish exports to the UK. We saw this clearly last October-No- vember when sterling was last at these levels,” Mr Healy said.

“The Irish cattle price is currently 111pc of the EU average price and has performed very strongly over the last number of months. The last thing we need now is a sustained period of weaker sterling against the euro,” he added.

However, Eddie Punch of the ICSA maintained that sterling was far more resilient than many commentators realised.

“We shouldn’t get carried away with talking ourselves into a beef price reduction over currency movements,” he said.