Big Three processors blamed for downward price pressures
Published 09/08/2011 | 05:00
They may not be heading for Croke Park but the 'Deise' farmers would be well advised to travel beyond their own county boundaries to get a better price for their stock. The big three processors are all sitting on the Waterford mens' doorsteps, but this trio are also responsible for the downward pressure on quotes last week.
One of the most striking aspects doing the rounds yesterday when gathering information for this column was the difference in approach by Kepak, AIBP and Dawn compared to the independent plants, who are holding their own -- in a few cases, the quotes have actually risen by 3c/kg.
It is a nonsensical situation that leads you to believe that the markets are strong enough to encourage some plants to up their quotes and that the bigger operators are just following a common agenda to drop prices.
In any case, the steer base quote for the early part of this week ranges from a low of 352c/kg in some of the big three plants up to 364c/kg in the likes of Liffey Meats who, incidentally, is rumoured to be expecting to be operating in East Galway before the end of next month.
Moyvalley is quoting 358c/kg for the Rs, 347c/kg for the O grades and 364c/kg for the Us but more is being negotiated when a farmer or agent is doing serious business. I heard that 360-364c/kg is being paid as a base in Slaney Meats and Dunbia, with the latter having paid 347c/kg flat for Os. In the north-west, a rise of 3c/kg across the board has happened since last week. This leaves Donegal on 386c/kg for in spec U-grade steers, 378c/kg for the Rs, 370c/kg for the O+ bullocks and 361c/kg for the Os. The heifers are 3c/kg more for each grade. The price difference between the in-spec and out-of-spec stock has closed to 6c/kg from 11c/kg so if you have the older or heavy types you will get, for example, 375c/kg for R-grade heifers. Elsewhere, as with the steers, the major players are trying to buy at a base of 357-365c/kg, whereas 365-375c/kg is more common among the other plants. With last week's kill at an estimated 26,000hd, it appears that the processors are not in a strong position to be calling the shots, which is worth remembering if you have stock to sell.
Flat prices for a mix of R and U-grade bulls of 375-381c/kg are said to have been secured in Kepak Clonee. Quotes and prices elsewhere for the U grades range from 364-381c/kg with the Rs at anything from 358-373c/kg. Os range from 347-353c/kg.
Reacting to the trade, the IFA's Michael Doran said that with the tight supplies, farmers were rejecting the lower quotes and that factories were finding it impossible to buy stock at those quotes and were having to pay well above those figures to secure cattle.