Why is the rally in cattle prices at the marts not matched by rising factory quotes?

There’s good news and bad news for beef farmers this week.

The good news is that buyers from Northern Ireland are putting a very solid base under the price of cattle, especially dry cows, at marts in the west, Border region and midlands.

However, the bad news is that the lift in prices seems only to be around the mart ring, or for our neighbours in the North and Britain, who are benefitting from a lift in retail beef sales across the water.

Mart managers explain the very simple logic to the increased buying from north of the border: the price for beef is better in Britain and Northern Ireland than it is down here.

So the maths add up for them: buy down here and sell over there.

However, when you look at the bigger picture as Martin Coughlan does in Ringside on pages 16-17 there’s more to the story.

During the Covid19 lockdown, British shoppers have increased the amount of red meat they are cooking at home.

With restaurants and food-service outlets closed for weeks on end, there has been a significant move towards cooking what you formerly went out to a restaurant to eat.

Household spending on red meat in the UK has increased by 26.9pc, while the total spend on minced beef surged by 34.5pc.

Sales of retail steaks rose by 24pc. The increase in steak sales was most notable in the last four weeks of the lockdown period — up almost 44pc.

Pricing strategy

The British supermarket pricing strategy was a significant influence in this trend, with steaks and other premium cuts sold at far reduced prices to move the consumer away from the cheap and versatile mince purchase.

And it was good news for British farmers too, with beef prices rising on foot of the stronger demand.

Further down the food chain, the presence of Northern buyers around mart rings is a welcome boost for Southern farmers.

As one mart manager pointed out, beef cattle in the South are now worth more in the mart ring than in the factory because the trade is being driven by UK demand in the shape of Northern exporters.

Which begs the question: why is the lift in Southern mart prices not reflected in higher factory quotes given that we export 90pc of our beef, and 50pc of that goes to the UK?

Is there a hole in someone’s pocket?