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Friday 9 December 2016

Let's hope the prices hold strong when these stores are slaughtered

John Shirley

Published 17/05/2011 | 05:00

Again this spring, the cry went out that store cattle were too dear. Some cattle will drop €100/hd when it comes to selling them as beef, warned the ringside forecasters. But the April grass powered on and so did the price of store cattle. All breeds, shapes and sizes of stock were snapped up like sweets at a school party. Those who waited longest, bought the dearest.

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Nobody can begrudge the sellers of the store cattle earning better prices this year, especially where the animals were bred and reared on the seller's unit. I have remarked before that, across the world, finishing cattle is a large-scale, low-margin enterprise that is usually highly mechanised. Breeding and rearing involves real work -- and creates the wealth.

Traditionally at the start of the Irish grazing season, store cattle prices are at a peak and at a higher price per kilogramme than the beef price. This was especially true when one could pick up the 'hairy, outlying stores' that were peppered with compensatory growth and ready to put on beef cheaply from grass. Younger and lighter cattle should always sell at a premium in €/kg liveweight.

In recent springs, however, there were very few of the hairy outliers on offer. Most of the store cattle going through the ring were hot from extra meal feeding. Yet they all found customers.

Store cattle bought in spring last year generally left a margin. My single best purchase turned out to be a very thin but well-shaped Charolais heifer bought in Enniscorthy on May 11. She weighed in at 450kg and cost me €750. She thrived from the start and when killed and graded U4L on November 17 at 385kg carcass weight, she grossed €1,229 at €3.19/kg. I estimate that she gained about 1.2kg/day but would have got meal at 3-4kg/day for the last seven weeks at grass.

At the other end of the quality scale, but still in goodish profit territory, a two-year-old dairy-cross heifer of indistinct breed, weighing 310kg, cost €308 in Tullow on April 23. At slaughter on October 19, she graded O3, weighed 239kg carcass weight and, at €2.97/kg, grossed €707. Again, she was mealed before slaughter to try to get her to an adequate finish.

Gross

In contrast, three fancy Limousin heifers, costing €788 at 370kg on April 30, were sold in mid-October for an average gross price of €915. They averaged 290kg carcass weight and graded R+4L. The mark-up of €127 was expected to cover all costs, including about €20 on meals, and leave a profit. There is huge variation in the potential of store cattle. Have they scope to grow? You also have to make a stab at what the factory beef price will be at the end of the year.

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Compared to spring 2010, this year's spring saw store prices jump by about 30c/kg liveweight, or 15pc for feeder bullocks. Store heifers are up by a similar amount.

The jump in lighter cattle and weanlings is even more pronounced. These are dearer by 40c/kg, or about 20pc on the year.

The beef price has also risen by 10-12pc since 12 months ago.

A general benchmark price for the heavier stores this spring has been €2/kg liveweight. At a 53.5pc kill-out, this equates to about €3.74/kg carcass weight on the day the animal is bought in the mart.

That is a worrying figure, given that the current factory price is only paying about €3.50/kg for R-grade steers. Clearly, the store price is well ahead of beef at the moment. My concern is the prevailing beef price when these dear stores are fit for slaughter.

John Shirley farms at Rathoe, Co Carlow

Indo Farming



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