Digging in on price has yielded dividends
Published 22/04/2015 | 02:30
The beef trade looks more solid at the moment as farmer resistance and unwillingness to accept price cuts over the past fortnight appears to have worked.
The estimated kill for last week at 29,212hd is some 2,500hd lower than the corresponding week last year and, more importantly, under the 30,000 mark. This last figure is often seen as a line in the sand where the farmer has more bargaining power when the weekly kill is under it. Deals being done at the present time often include something on transport as well.
While a few plants are continuing to quote a base of €4.15/kg for the steers, farmers are refusing to sell at less than €4.20/kg and factories are freely willing to pay this. Quotes and prices for the heifers run between €4.25-4.30/kg, with more and more finishers securing the higher figure this week before they agree to sell. Some big operators are commanding up to €4.35/kg.
Bulls are selling at anything from €4-4.30/kg. U grades have made up to €4.30/kg, while mixes of Rs and Us have been sold at €4.25/kg. Farmers selling R grades are getting €4.20/kg in the main. The O grades appear to be making from €4.00-4.05/kg. Age and weight are also very negotiable with the plants at the present time. What a difference a year makes.
If you are selling, it is well worthwhile getting a few quotes before making a final decision who to sell to. The factories want stock and are anxious to close deals and kill the cattle as soon as possible. You will only sell them once so make sure you get the last cent for them.
The plainer type cull cows have improved a little. The P grades are generally moving at €3.50-3.60/kg, while the Os are making from €3.60-3.70/kg. Farmers with top quality well- fleshed heavy cows are getting prices of between €3.80-4.00/kg.
IFA livestock chairman Henry Burns said pointed out that the official reported price from the Department of Agriculture for week ending April 6 was an average of €4.28/kg for R3 steers and €4.38 for R3 heifers. In addition R grade bulls were paid an average of €4.18 and U grade bulls €4.29.
Bord Bia said trade was steady in Britain, while a mixed trade was reported from Continental Europe. Cumulative supplies for the year to date are down around 11,000 head on supplies for the corresponding period last year standing at around 460,000 head.
In Britain, cattle prices have firmed with R4L steers averaging €5.14/kg. Trade has picked up since Easter due to better weather, with demand best for steaks, rumps and strips.
There is little change in France, the R3 young bull price was down 4c to €3.88/kg, and the O3 cow price was unchanged at €3.32/kg. In Italy, the R3 young bull price was down 6c at €4.12/kg, while the O3 cow price was down 2c to €2.91/kg.
Elsewhere, British beef farmer Adam Quinney, who owns Arrow Valley Feedlot and is the former NFU vice president, told a recent ASA conference that 55pc of Irish beef is ending up in the mince section of British supermarkets, with British beef continuing to be sold as more valuable cuts.
Meanwhile, the latest European Commission beef forecast predicts little change in supplies in 2016. Beef output for 2015 in the EU-15 is expected to increase almost 3pc to 6.53m tonnes, driven by increases in Italy, Netherlands, France and Spain. Outside of the EU-15, Poland is expected to see a 5pc rise in production this year. Irish supplies are expected to be down around 7pc this year compared to previous year levels. Similarly, Britain is expecting to see a 2pc decline in production this year.