Farm Ireland
Independent.ie

Monday 26 June 2017

Factories making more effort to drive down their quotes

Beef

Joe Healy

If our beef processors get their way, the positive attitude that was evident among farming folk at the Ploughing Championships will quickly dissipate.

It is obvious that a renewed effort is being attempted to put downward pressure on prices and quotes.

What adds to the annoyance of this is the further firming of prices in Britain, where the R4L grade steers are reported as making more than €4/kg when VAT is accounted for.

When this is compared to a base of 350c/kg here on a 380kg carcass, the price difference on two similar animals works out at a minimum of €190. This is an insult to Irish finishers but, unfortunately, it is all they have come to expect off the processors.

Harvest 2020 springs to mind and the absolute necessity of trust and respect between all cogs in the wheel. For a start, the processors need to begin treating their suppliers fairly.

As you can see from the table, steer quotes are back by 3c/kg in a range of 347-353c/kg. Luckily, farmers are having success at bargaining and are generally securing base prices of 350-353c/kg, with some finishers holding out for 355c/kg.

In-spec steers being killed in Donegal Meat Processors for the early part of this week are making 378c/kg for the Us, 370c/kg for the Rs and 361c/kg for the O grades. Out-of-spec types are 11c/kg back from those prices in each category.

Premium

The heifers are commanding a premium of 3c/kg over the bullocks. Elsewhere, the heifers are quoted at a base range of 355-362c/kg in the main. I did hear of 365c/kg being offered from an AIBP plant in the southern half of the country, and up to 370c/kg was mentioned for Kepak Clonee and for R+ heifers over 320kg going into Slaney Meats.

The IFA's Michael Doran advised farmers to strongly reject the negative price pressure from the factories, which he described as totally unjustified and opportunistic.

He added that some plants have increased the cow prices by 6c/kg this week, which reflects the real beef market demand and also that the fifth quarter is worth 30-35c/kg to the factories.

Prices for U-grade bulls range from 355-375c/kg, with the Rs at 350-365c/kg. O grades quotes are running from 339-347c/kg.

Tops for heavy U-grade cull cows appears to be the 345c/kg from Moyvalley, where the Rs are making up to 330c/kg. Kildare has also been mentioned at this 330c/kg for the Rs. Donegal is paying 333c/kg for the Us, 328c/kg for the Rs and 322c/kg for the O grades. Generally, the P+ grades are being quoted at 291-314c/kg depending on carcass weight. The O grades are ranging from 298-319c/kg, with the Rs at 314-330c/kg.

Cattle supplies are running 5pc lower than the same period last year, according to figures from Bord Bia.

The trade in Britain remained firm, reflecting ongoing tight supplies, with demand reportedly steady across all parts of the carcass.

Reported cattle prices from the AHDB have firmed further, with GB R4L grade steers averaging Stg335.4p/kg deadweight (equivalent to 402c/kg including VAT deadweight) for the week ended September 17.

Adjust

On the Continent, demand continued to seasonally adjust from hindquarter product to forequarter product. The best trade reported was for heels and featherblades.

In Germany, R3 young bull prices fell by 3c to €3.70/kg, while O3 cows prices dropped by 7c to €2.97/kg. R3 young bulls fell by 12/c to €3.78/kg in Italy, while O3 cow prices remain unchanged at €2.96/kg.

In France, the German cow hind is making €4.63-4.73/kg, while the Irish steer hind is making €5.26-5.46/kg inclusive of VAT.

Meanwhile, Spanish beef consumption has dropped by nearly 8pc over the past 12 months to leave per capita consumption at 6.5kg. In an effort to boost sales, Spanish retailers have been aggressively reducing beef prices to the point where beef steaks have been priced lower than chicken breasts at €6.99/kg in Carrefour last week.

Elsewhere, Minister for Agriculture Simon Coveney welcomed a decision by the Singaporean authorities to lift their suspension on the importation of beef from Ireland following a successful inspection visit to Ireland by a high-level Singaporean veterinary delegation in July, to examine our beef control systems.

Suitable animals will be aged under 30 months and originate from a list of specifically approved plants.

Indo Farming