Farmers, who have been receiving the highest prices for quality beef cattle for nearly four years, have been warned by the trade not to expect the high prices to continue.
This week farmers were being paid €2.80/kg (£1 per lb) for cattle under 30 months old and factories are also quoting almost as much for older animals which cannot be sold into the British market.
The factories were taken by surprise at the demand for beef before Christmas and when the factories reopened in January, they found that quality animals had become scarce.
Farmers too, had not expected such a demand and many did not have animals ready for sale when the demand came. This pushed up the price over the past 10 days.However, factory sources were claiming yesterday that the demand for beef from both under 30 months and over 30 months, will ease off over the next few weeks and prices will drop.
"The demand is still there, especially in Britain, but we expect more animals will become available and this should bring down the prices," said one factory buyer. He said that beyond the British market, the demand from Europe was still slow and there was still no major quantities of beef going to other markets. Mr Kevin Kinsella of the IFA, said the main shortage in beef animals had been caused by the huge number of cavles exported to continental Europe two years ago.
"We now see the Beef Premium applications for 22 month old animals is down 200,000 head and this has made a large impact on availability of stock," he said.
He said he disagreed with the beef factories when they claimed prices must come down because the demand from Britain would continue into the coming year.
He said it was likely that Ireland would be able to at least match the 210,000 tonnes put into Britain last year, an increase of 65 per cent, because the demand was based on the loss of stock caused by the foot-and-mouth outbreaks there. However, exports to the rest of Europe had fallen by more than 40 per cent and demand for beef had not recovered there.
The factories and farmers are hoping that the Egyptian market may soon reopen. Before it closed because of the BSE scare it had been Ireland's largest customer for beef. There are still some veterinary issues to be arranged between the Irish and Egyptian governments but price will ultimately determine whether the trade will resume.
The discovery of BSE in Japan has caused disruption to international markets and Australian and Argentinian beef exports there have been badly hit.