Ongoing Differential In NI And GB Prime Cattle Prices

UK - IN the last few weeks, a decline in Great Britain (GB) farmgate cattle prices, particularly in England, coupled with broad stability in Northern Ireland (NI) prices has caused a narrowing in the price differential between NI and GB. However, a substantial differential remains between NI and GB prices.

26 February 2010

3 minute read

Europe

Reported prices show that the differential has varied depending on the time of the year. At the start of February 2009, the differential between GB and NI prime cattle prices was much narrower, with only 6p/kg separating average NI and GB R3 steer prices.

This gap widened as the year progressed and was at its widest in early September when it was almost 29p/kg (see Figure 1). Since then, the gap has gradually narrowed and by the end of this January the difference was 15p.

This is in line with trends in 2008 when the differential was narrower early in the year and wider in the back end. However, with this seasonal trend in mind, it is worth noting that the range of prices paid for R3 steers across the various regions is much wider this January, compared to last January. Figure 1 shows that R3 steer prices across the GB regions were very similar at the start of last year. On average last January, the NI R3 steer price was 11p/kg lower than the equivalent GB price, with prices in ROI a further 6p/kg lower again.

This January shows a very different picture, with a clear gap visible between each of the GB regions, with prices lower in the south and higher in the north. The gap between NI prices and prices in Southern / Midland England is similar to last year, and if anything there has been a slight narrowing in the differential between NI and Southern England in January 2010 compared to last January.

This contrasts with developments in the differential between NI prices and those in Scotland / Northern England. Last January the average weekly Scottish R3 steer price was 13p/kg higher than the corresponding NI price. This January the average differential was 26p/kg.

Scottish prime cattle prices are clearly the highest in the British Isles, outperforming prices in each of the other regions on a consistent basis. Over 52 weeks to the end of January 2010, the weekly average Scottish R3 heifer price was 290p/kg.

By comparison, the equivalent figure for NI was 24p/kg less at 266p/kg. The gap is even wider at the R4 grade for heifers with an average weekly differential of almost 31p/kg. In NI the average R4 heifer price is 4p/kg lower than the R3 price, whereas in Scotland the R4 heifer price was higher than the R3 price.

While Scottish prime cattle prices have outperformed NI prices throughout 2009, NI cow prices have, on average, been similar to Scottish cow prices (see Figure 2). In NI this January, the average weekly cow price was 193p/kg, almost 10p/kg higher than the corresponding figure for GB.