Farm Ireland
Independent.ie

Monday 1 May 2017

Rise of €200 at factory is swiftly lost at mart

Beef

John Heney

Selling the first load of cattle is a hugely significant event on a beef farm because this is the first real test of how your cattle have done in any given year.

I found myself in this situation a few weeks ago when I sent off my first load, so you will appreciate that it was with some trepidation that I examined the factory returns.

As it turned out, I was reasonably happy with their performance and I decided for interest to compare them to the returns for my first load of beef last year. By coincidence, they were sold about the same time as last year and killed out at the same weights.

This year's cattle were quite a mixed bunch as they contained 12 Friesians, three Angus-crosses and one Jersey-cross. While a few of the Friesians did grade P, they were mostly O3s, which was fine, and I was also quite pleased with the Jersey-cross, which graded P+3+ and came in at about €100 below the average price for the load -- which wasn't too bad.

The three Angus did well, two grading R and one O+ with fat scores from 3+ to 4=. Pricewise, they beat the Friesians by about €200/hd. Unusually, they were bought in at about the same price as the Friesians, probably because they were around 28 months old at the time. Why they weighed just 410kg at two-and-a-half years of age is a mystery to me as they did well putting on more than 250kg in their 12 months with me, which is a little ahead of my average weight gain.

However, the most obvious fact contained in the returns was the increase in price of about €200 last year. This was due mostly to the increase in price/kg of 57c (a grid price of 360c against 303c last year), better fat scores and improved grades.

Crashing

If I was a little carried away by the increase in price this year, I was quickly brought crashing down to earth when I went to the mart to replace them.

Not only are mart numbers still relatively small but Friesian stores appear to be quite scarce. To cut a long story short, I ended up with nine Friesian stores weighing just over 400kg and costing about €200 more than they would have last year. It reminds one of the old saying "easy come, easy go".

This is a good example of how increased beef prices are quickly passed back to the store producers who, after a number of lean years, are again being rewarded for their work.

That's the cattle trade. It goes in cycles and there are no guarantees. However, it does point the finger at the low prices paid by beef plants over the past few years and how these prices were probably responsible for the poor market, which saw so many cheap calves leave the country last year.

Listening to the radio recently, I was surprised to hear a suckler producer, obviously delighted with the current high store prices, suggest that the single farm payment (SFP) may no longer be needed.

I feel that people like this should realise that such prices might not exist if the person buying their weanling did not have their finishing enterprises subsidised by the SFP which, at the moment, is mostly being passed back to the primary producer in the form of better prices.

Overall, I feel that people would do well to realise that ordinary cattle are making about the same price/kg as they were more than 20 years ago. Allowing for inflation and including the SFP, this means that beef cattle are still making about €200 less than they did in 1989. A sobering thought!

As a postscript to my piece last month, the little shelduck did leave the pond, but it returned some evenings later with what appeared to be four siblings. When I was passing the pond a few evenings after that, I spotted 10 young shelducks and their parents swimming around.

They have since left for good, but it looks like there can be happy endings after all.

John Heney farms at Kilfeakle, Co Tipperary. Email: heney.john@gmail.com

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