Wednesday 22 October 2014

Signs of life in the beef sector but crucifixion of finishers continues

Joe Healy

Published 23/04/2014 | 02:30

A beef farmer I spoke to over the weekend remarked that while last week's beef summit came and went, it may as well have been referred to as the Last Supper as the crucifixion of beef finishers continues.

While I have no good news for him this week, I will say that there does seem to be a little more life to the trade with numbers of bulls and cull cows appearing to be tightening significantly, according to factory sources and agents.

This is also reflecting itself somewhat at price level, with the good cows showing an improvement of 10-20c/kg in some factories and the R and U grade bulls also enjoying a bit more demand with prices of up to 470c/kg for a mix of both grades in more than one plant.

In the main, however, the Us are selling for 360-370c/kg, with the Rs generally moving at 350c/kg. O grades are making 300-330c/kg.

I heard of one farmer who had prime young cattle to sell and he was trying to "sweeten" the deal with a number of cull cows. Yep, you read right. Imagine what that says about our industry when you are hoping that by offering a few old cull cows, the factory might show more interest in your prime stock.

Quotes

The best I heard for the tops of the cows was 350c/kg. The Us range from 330-350c/kg, with the Rs at 320-340c/kg.

Quotes and prices for the O grades run from 290-315c/kg, while the P grades range from 270-290c/kg.

I would need the whole paper to go through all the different prices that are being offered and paid for steers and to a lesser extent the heifers.

Firstly, there are a number of different base quotes for in-spec steers. Then there are any amount of quotes for overage types which generally start off at a minimum of 10c/kg below the in-spec quotes.

In the interests of avoiding despair, we won't go to the depths of some of the figures that factories have insulted finishers with.

Suffice to say that in some cases the farmer would be better off to have an old O grade cow than a 31 month old O grade bullock.

Then there are the different weight restrictions from the various factories. All in all, if the desire from the processors is to confuse the farmers, well then they have been spectacularly successful!

As for the underage steers, the quotes remain in the 385-395c/kg range, with prices generally at the 390-395c/kg.

The heifers are reasonably similar with quotes more often than not between 390-395c/kg, with sellers holding hard for a base of 395c/kg when selling.

Commenting on the trade, the IFA's Henry Burns said that even factory sources are expecting a tightening of supplies as we move into May and that this should help to underpin the trade and hopefully lead to some positive movement on price.

He added that the IFA had outlined to Minister Simon Coveney at last week's meeting that the processors had severely damaged farmers incomes with their unfair juggling of the specifications throughout the winter and spring months and that this new process would be judged on its ability to stop the undermining of the beef sector.

Bord Bia figures showed that the cumulative supplies for the year to date are running at around 55,000hd, or 13pc above the figures for the corresponding period last year.

Increase

Supplies of heifers are continuing to show the strongest increase within the prime cattle category with numbers 17pc higher.

In Britain, reported cattle prices from the AHDB were down slightly with GB R4L grade steers averaging at 366.7p/kg deadweight (equivalent to 467c/kg including VAT deadweight).

Good demand has been reported for burgers and steaks with the latest spell of fine weather, combined with retail promotions, helping to boost demand in the lead up to Easter.

However, sluggish demand remains for certain forequarter cuts.

On the French market, little change was reported this week with a strong supply of competitively priced imported meat continuing to have some impact on the trade.

In Italy, there was an uplift in demand for Easter, with increased seasonal demand for hindquarter cuts reported.

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