Farm Ireland
Independent.ie

Tuesday 26 September 2017

Base prices for steers up 7-10c/kg in past two weeks

Beef

Joe Healy

Beef finishers that sold cattle for as little as 347c/kg in the past fortnight have every reason to feel as short-changed as the Welsh rugby team after their inspirational captain was red carded in last Saturday's semi-final. Since then, the base price for steers has moved upwards by 7-10c/kg and, in some cases, even more.

Significantly, this has happened despite the weekly kill continuing to run well ahead of last year's levels for the same period. Last week's estimated kill was 36,135hd, compared to 33,869hd slaughtered during the corresponding week last year. Over the past three weeks, the total kill has been approximately 7,800 animals over the same three weeks in 2010, yet quotes and prices have improved in the past fortnight.

I have also heard reports of factory men literally chasing to farms as soon as they hear the farmer has beef to sell. I understand that even the most hardened grid operators have broken ranks and agreed to deal on a flat price system in order to buy cattle. All in all, it is a very positive period for the cattle trade.

Quotes show an improvement of 3-6c/kg but prices appear to be up by anything from 3-10c/kg. The general quote for steers is 353-355c/kg but most farmers are holding out for a base of 355-365c/kg. It is a similar story for heifers, with quotes ranging from 358-364c/kg but averaging 364-375c/kg. Flat prices of 336c/kg have been attained in the east for a mix of P and O-grade over-age steers.

Donegal has upped its price by 12c/kg after reportedly losing heifers and bulls to plants further south.

Scarce

In-spec U-grade heifers are now making 387c/kg, with Rs at 378c/kg. O+ grade heifers are making 370c/kg with the O- at 364c/kg. The steers are 3c/kg behind the heifers while out-of-spec cattle are at 6c/kg behind the in-spec stock.

Young bulls, according to informed sources, are scarce. Some deals for a mix of U and R grades are being done at 380c/kg. Quotes for Us range from 364-380c/kg. R grades are being quoted at anything between 350-370c/kg while the Os are at 342-358c/kg.

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IFA livestock chairman Michael Doran said the trade was much stronger this week due to tightening supplies, with up to 375c/kg being paid for heifers and 365c/kg for bullocks. The best U-grade cows are making from 325-336c/kg. Heavy R grades are in the range 314-330c/kg, with lighter types selling between 308-316c/kg. Prices for Os run from 300-319c/kg while P+ grade cows are making 291-314c/kg.

Bord Bia reported that the cattle trade was steady during the week, despite bigger supplies.

Quotes for R-grade steers under the Quality Payment System were generally €3.47-3.55/kg. Heifer quotes were in the region of €3.55-3.60/kg. These prices exclude the 6c/kg on in-spec Quality Assured stock. O-grade cows ranged from €2.94-3.05/kg. On a year to date basis, cattle supplies are running more than 4pc lower than the same period last year.

In the UK, trade remained good across most cuts with demand reportedly best for visible leans (VLs), reflecting the tight supply situation.

Some weakening in demand was reported for steak cuts and, in particular, striploins and ribeye. Reported cattle prices from the AHDB remained relatively steady with GB R4L grade steers averaging at Stg 335.6p/kg dw (equivalent to €4.03/kg including VAT deadweight) for the week ended October 8.

On the Continent, trade has begun to settle down across some of the key markets, with prices reflecting this pattern. In Germany, R3 young bull prices remain unchanged at €3.83/kg, while O3 cows increased by 2/c to €3.03kg.

R3 young bulls in Italy eased by 6/c to €3.96/kg, while O3 cow prices also loosened by 4/c to €2.80/kg. In France, the Irish steer hind is still averaging €5.05/kg inclusive of VAT.

Headway

Elsewhere, despite a recent visit by our Tanaiste to Japan and South Korea in a bid to drum up trade, he and his team failed to make headway on reopening the Japanese market to Irish beef products, which have been banned for more than a decade.

Meanwhile, UK exports of food and non-alcoholic beverages performed strongly during the first half of this year, with a rise of 13pc recorded. This reflects solid growth to both EU and non-EU markets.

Some slowdown in the rate of growth is expected for the remainder of this year as the impact of the problems surrounding the Euro zone debt crisis, coupled with slowing global economic growth, is expected to affect trade.

The meat category performed strongly with exports increasing by more than 18pc to £820m. Despite lamb sales showing a 13pc lift to £171m, a 33pc increase in beef exports to £203m was enough to see beef overtake lamb as the leading meat subcategory. The principal destinations behind the growth in beef exports were Netherlands (+58pc) and Ireland (+31pc).

Exports to EU and non-EU markets grew by almost 13pc and 15pc respectively. Ireland remains the number one export destination for UK produce at £1.4bn, with exports 8pc ahead of last year.

Double digit growth was recorded in Netherlands, Germany, Belgium, Denmark, Poland and Sweden. The USA remains the most important non-EU market, with growth mainly driven by increased fish and seafood exports. Demand from Asia and Africa rose by 18pc and 20pc, albeit off a low base.

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