Farm Ireland
Independent.ie

Wednesday 23 August 2017

Record high for factories as price fall is just 2c/kg

Martin Ryan

Beef processors paid an average of 5c/kg more than their quoted prices for cattle to maintain supplies during August, according to figures compiled by the Department of Agriculture.

In the process, the factories set an unlikely new all-time record high for beef for the month.

The Department database shows an average base price of 363c/kg was paid for R=3= steers, while the average base for R=3= heifers was 373c/kg.

It was also the first time in several decades that the average price fall over the course of the summer was just 2c/kg, a sure sign that factory supplies are under severe pressure.

But farmers will be unhappy with the fact that the price penalties for poor grading animals are several multiples of the bonuses being offered for premium quality cattle.

This disparity in the pricing structure would appear to favour the beef processors, given that lower grade cattle grading O outnumber those grading U by over seven to one.

The average premium over the base price for U=3= steers was 15c/kg, while an average penalty of 23c/kg was applied to O=4= steers.

There was also a wide variation between individual factories on the premiums and penalties applied.


Penalty

The premium for U=3= ranged from 13-20c/kg during the month. However, penalty for O=4= grades was more than double this with a range of 18-41c/kg between different plants.

A penalty of 41c/kg reduced the returns for an average weight steer by €135 when compared to the base price.

The IFA has urged farmers to consider selling more cattle through the mart system for the most competitive prices.

Intake figures from the factories show that there was a decline of 3pc in the steer kill compared to the same month in 2010. Heifer supplies were just over 1pc higher than 2010.

The demand for cattle during the month underlined the strength of the beef export markets and is contributing to a positive season for producers.

Indo Farming