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Monday 25 September 2017

€150 variation recorded in factory steer returns

Martin Ryan

Wide disparity also reported in penalties and bonuses for heifers

A difference of up to €150/hd has emerged for steers of similar grade and weight depending on the factory to which the animals are supplied for slaughter.

Wide variations are also being reported in the level of penalties and bonuses for heifers.

Big differences in premiums for quality stock and penalties for the poorer grading animals between factories has become a pattern of the trade as cattle supplies have tightened and producers maintain pressure on base prices.

Analysis of the prices paid for O-grade steers for the week ending May 20, compiled by the Department of Agriculture, revealed an eight-fold difference in penalties, with individual factories penalising O-4= steers by up to 48c/kg. The lowest penalty applied was 5c/kg. The national average penalty applied was 21c/kg, but the penalty applied at 18 of the 25 meat plants was higher than average for the week.

The seven factories who penalised less than average were Kildare Chilling, Ashbourne Meats, Slaney Meats, Donegal Meats, Jennings, Dunbia and Euro Farm Foods.

There was a four-fold difference in the penalty from base price for O=3+ steers, which ranged from 6c/kg to 26c/kg.

On the plus side, similar variations were revealed. Producers were paid between 4c/kg and 12c/kg over base price for U=4+ steers and between 7c/kg and 29c/kg extra for U=2+ stock, depending on the factory.

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There was a difference of 17c/kg between the 25 factories on the base price for R=3= steers, ranging from 410c/kg to 427c/kg and individual factories within the same groups paid up to 9c/kg more than others.

Poorer grading heifers were also heavily penalised by some of the factories. The penalty from factory base price varied between 8c/kg and 69c/kg for O-grade heifers and the premium on similar U-grade heifers varied between 2c/kg and 27c/kg.

ALARMED

Meanwhile, the ICSA's beef chairman, Edmond Phelan, said he was alarmed at proposals from some factories to reduce the upper weight limit on bulls.

In some factories, the upper weight limit has been cut down to 440kg, with talk of a possible limit of 380kg in certain cases.

Mr Phelan said this move was making it increasingly difficult for farmers to make a profit on their animals.

"At the end of the day, there is no point in selling a bull if there's no profit in it -- that makes the whole trade unviable," Mr Phelan said.

"Suckler farmers need to be getting in excess of €1,000 for their quality older weanlings, so the beef finishers have to be able to achieve a realistic end price from the factories.

"If the factories insist on imposing these limits, there will be negative consequences for the trade as a whole," Mr Phelan added.

"More and more weanlings will be sent abroad as live exports, meaning less beef will be processed in Ireland. This will have a direct effect on employment, on our ability to reach targets for beef production for Food Harvest 2020, and on efforts to open up new markets abroad for Irish beef."

Mr Phelan called on the factories to seriously reconsider these weight limits and explore more ways of securing premium prices for Irish beef.

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