The Market for beef cattle and hoggets in Northern Ireland is now seeing an increase in competition following the substantial weakening of the sterling exchange rate relative to the euro.

Recently the euro exchange rate has been almost as high as 75pence sterling to one euro. This relative weakening of around 10% to should provide a corresponding boost to livestock prices in NI.

Buyers from Southern Ireland have pushed up prices for hoggets in the live marts and they are in a position to pay more. Southern factory prices are now at 370 cent/kg (275pence/kg). There have also been reports of Southern buyers purchasing bulls in the North at the equivalent of 228pence/kg. Irish buyers are active in procuring cows and over thirty month old cattle in Britain taking advantage of the strong euro.

The exchange rate shift means that sales of beef from the Republic of Ireland into the UK have to achieve a price rise of around 10% in sterling terms just to maintain the prices obtained in euro. This leaves the way open for prices in Northern Ireland to rise by that amount unless there a fall in prices occurs SOuth of the border.

Southern Ireland prices have risen by around 20cent/kg over the Christmas and New Year period and the Irish Farmers Association (IFA) are encouraging beef farmers to 'dig in' and not accept an uneconomic price for their stock.

The combined effect of the price rise over the holiday period in the Republic coupled with the weakening of the sterling exchange rate against the euro is equivalent to a substantial price increase in the region of 30 and 35 pence per kg deadweight.

The old situation of farmers here being told that the strength of sterling was putting downward pressure on prices by making UK imports cheaper and exports less competitive in Europe has now been reversed.

If sterling remains at around 75pence to 1 euro, or weakens further, higher prices for stock will be inevitable.

Price increases are badly needed in order to cover the substantial increase in production costs, which have been as high as 20%.

The Irish Food Board are saying that the market fundamentals point to good prospects for beef price improvements in 2008.

In The Irish Food Board annual review and outlook published this week, Bord Bia are predicting the EU beef deficit to increase by 25% this year to 350,000 tonnes and for Irish imports into the UK to increase by 9%.  This is before any consideration is placed on Brazilian beef restrictions.

All in all 2008 should be a positive year for beef prices.

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