Farm Ireland
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Saturday 21 January 2017

Premium paid for prime cattle soars by up to 60pc

Martin Ryan

Published 04/10/2011 | 05:00

The premium being paid to producers of prime quality cattle by the factories has increased by up to 60pc over a four-week period.

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However, the latest report by the Department of Agriculture on cattle prices also shows that producers could bag an extra €120 for their animals by simply switching factory. Analysis of the actual prices paid to producers, compiled by the Department of Agriculture, has revealed that a September national average of 21c/kg above base (R= 3=) price was paid for U= 4- heifers, compared to 13c/kg over base in August.

However, there was a slippage of up to 5c/kg in the base when the prices released by the Department for the third week in September were compared to the corresponding week in August.

The premium for the quality steers was also stronger last month at a national average of 16c/kg over base for U= 4- compared to 13c/kg over base in August.

The quality payment system (QPS) premium for U= 4- steers and heifers is 18c/kg without taking into account the bonus 6c/kg for quality assured animals and the penalty of 6c/kg which applies to animals over 30 months.

Margin

The national average base steer price slipped from 363c/kg to 358c/kg, but a wide margin has opened between individual factories on the premium being paid for quality stock and the penalties being applied to the lower grading animals.

This confirms that there is a significant advantage for producers by shopping around for the best prices.

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The premium on U= 4- steers at individual factories varied from less than 10c/kg to 23c/kg.

The national average premium on U= 4+ steers was 6c/kg; on U- 3= a premium of 11c/kg was paid, and on R+ 3= the premium was 5c/kg.

The best price for U= 4- steers was paid by Ashbourne Meats (Roscrea) at 379c/kg, including a premium of 22c/kg over the factory base of 357c/kg.

Dawn Meats (Charleville) paid a similar premium on a slightly lower base of 355c/kg, and Meadow Meats (Rathdowney) -- also a Dawn plant -- paid the highest premium of 23c/kg, but on a lower base of 351c/kg.

The base average for heifers was 370c/kg and the premium on U= 4- heifers ranged from 13c/kg to 28c/kg, with the national average at 21c/kg.

Kepak (Clonee) paid the highest premium at 28c/kg on a base of 383c/kg, bringing the actual price to 411c/kg.

On the penalty side for O grade steers, there was a variation of 13c/kg to 26c/kg on O= 4= steers against a national average of 22c/kg and QPS rate of 18c/kg, after allowing the concession of 6c/kg introduced last year.

The penalty on O= 5- steers ranged from 18c/kg to 51c/kg, with an average of 38c/kg. The QPS set the penalty at 42c/kg.

The difference between the lowest and highest penalty would represent a difference of up to €120/head to producers.

The penalty on O= 4= heifers varied 13c/kg to 38c/kg between factories. The lowest penalty was applied at Liffeys (Hacketstown) where producers were paid 342c/kg on a base of 355c/kg.

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