Farm Ireland
Independent.ie

Thursday 19 October 2017

Factories attempt to cut price to €4.10/kg base

Darren Clarke
Darren Clarke

Joe Healy

While Darren Clarke's appointment makes it two in a row for Irish Ryder Cup captains, beef finishers do not have any desire for two years of Irish beef prices at least €1/kg behind the British price. Bord Bia reports the VAT inclusive price from across the water is at €5.28/kg for the R4L steer.

Here, the factories have spent the past week trying to drop prices by 5c/kg to a base of €4.10/kg.

Their attempts to apply this negativity is typical but unnecessary at a time when we are also reading good news stories every week about market opportunities in America and China for Irish beef.

Yes, the weekly kills have been quite strong and continue north of the 30,000hd mark.

However, last week's estimated kill of 31,321hd was 800hd lower than the corresponding week last year, and may well be the first signs of this year's weekly kills dropping below 2014 levels.

Farmers are aware of the expected shortfall this year and feel it could begin to impact sooner rather than later. The parties involved in the 'Forum' need to ensure that explanations, reasons and answers from the processors are satisfactory.

I have heard the concept of 'producer organisations' mentioned quite a bit recently and, while they definitely will have a role, we can be fairly confident they are not going to cure all ills in the beef sector.

Deal

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Finishers are holding out strongly for €4.15/kg, while farmers being offered a base of €4.20/kg for heifers are refusing to deal without €4.25/kg.

Some plants have agreed to pay a base above this figure. The best I heard for a mix of R and U grade bulls was €4.20/kg flat. A number of €4.15/kg prices have been offered flat for mixes, while individually, the Rs appear to be at €4.10/kg and the Us at €4.20/kg.

The IFA's Henry Burns said factories are offering sweeteners like dropping transport and clipping charges and, on occasion, agreeing to give the 5c/kg extra.

When you hear of up to €4/kg for cull cows, you would be forgiven for assuming the beef trade and markets are in a good place.

U grades are making from €3.80-4.00/kg, with the Rs making from €3.75-3.90/kg. Prices for the O grades vary from €3.50-3.80/kg, while the Ps are selling for €3.30-3.45/kg.

Bord Bia said the finished cattle trade remained robust, but there were fewer sellers achieving the higher quotes of recent weeks.

They reported €4.15/kg steer base price on the Quality Payment System, with €4.20-4.25/kg for the heifers, and €3.40-3.55/kg for O grade cull cows.

Numbers of steers and heifers being presented for slaughter continue to be quite strong, at 13pc and 7pc higher than 2013.

This has been offset by a reduction in the availability of cows (down 8pc) and young bulls (23pc lower).

Round cuts have experienced some seasonal slowdown in Britain, although there are signs of slight improvement in some of the steak cuts.

The R3 young bull price in France was unchanged at €3.95/kg, while the O3 cows were up 3c/kg to €3.21/kg.

Demand in Italy for most cuts remains low, but a slight increase in price left the R3 bulls at the equivalent of €4.19/kg and O3 cows at €2.68/kg.

Indo Farming