Scarce supplies force beef factories to slash penalties
BEEF factories slashed the penalty on poorer grading animals as they came under pressure to secure supplies in December, adding up to €50/hd to producer returns prior to Christmas.
The latest official figures show that the national average penalty from the base price (R=3=) applied by the processors to some R and O grade steers was reduced by 50pc during the third week in December compared to the corresponding week in November.
The prices paid for some R grade heifers benefited from reductions of up to 40pc in the penalty from base price during the same week as the factories were forced to compete for scarce supplies of cattle.
There was a 50pc increase in the bonus paid for some U grade cattle during the same week.
The newly released figures on the actual prices paid to producers for cattle slaughtered during the period December 19-23 were compiled by the Department of Agriculture on returns from the pay cheque's issued to farmers for the cattle.
The national average reduction in price from the base (R=3=) to R-5- steers was 11c/kg compared to 22c/kg for November, while there was a corresponding drop from 30c/kg to 15c/kg for O-4= grade steers. The average penalty was reduced for all grades.
The national average premium paid by the factories for U=4+ steers was 12c/kg compared to 8c/kg the previous month.
There was also a wide variation in the prices paid between individual factories. The base price factory average varied from 390c/kg to 415c/kg.