Farm Ireland
Independent.ie

Tuesday 26 September 2017

Struggling bulls cut across board by up to 10c/kg

BEEF

Joe Healy

Beef farmers can identify with the Irish rugby team's gut-wrenching feeling this week. While it was soul destroying to see the last play of the game snatch victory for the All Blacks, we are now moving into the last month of the year and there is no sign of finishers enjoying a late price surge.

It would appear however, that there is no All Black pressure being put on the factories either by farmers or the organisations to secure more favourable prices.

Factory propaganda about the market place being sluggish fails to wash with farmers who are following the British trade, where similar type stock continue to make up to €1/kg more than they are making here. This is €400/ animal on a 400kg carcase. It does need an explanation.

Quotes for steers remain at the €4/kg with many factories trying to quote down between 380-390c/kg for non-Quality Assured (QA) and or overweight stock. The heifer quote is generally at the 410c/kg. Reports suggest that a few are attempting to offer as low as 405c/kg.

As with the steers there is a cut for the non-QA heifers with as low as 390c/kg mentioned. Some hardened sellers are securing up to 415c/kg. Some farmers may jump down my throat for saying this but I firmly believe that we need to take the non-QA excuse away from the factories and set a date into the future whereby all farms will have to be Quality Assured. Most are at the moment but it needs to be totally across the board, no half measures. It would also be extremely positive from a marketing point of view.

The bull trade is tough with plants letting on that they are not interested. The best I heard was 410c/kg for U grades. Quotes are as low as 400c/kg while the R quote varies from 390-400c/kg.

TESTING

Bulls grading O are making from 375-385c/kg. The cull cow has also had a bad week with at least a 10c/kg cut across the board. The best of them are now struggling to get beyond the 350c/kg mark where earlier this month they were making up to 380c/kg.

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Similarly, the R grades are back from the highs of 360c/kg a few weeks ago to an average of 330c/kg. O grade cows are selling for 300-310c/kg with the Ps now firmly under the even money at 280-295c/kg.

IFA livestock chairman Henry Burns said cattle supplies are very tight and factories are finding it impossible to buy at quoted prices and are paying 5c to 10c more to get stock. He said some flat price deals for over 30 month steers at €4.05 were done just to get numbers in.

In general Henry Burns said in-spec stock is very tight with the steer base at €4.00-4.05/kg and heifers at €4.15-4.20/kg. The latter are scarcer. Bulls are ranging from €4.00-4.05 for Rs and €4.10-4.15 for Us.

Mr Burns said that the factories are trying to attack non-QA stock with severe price cuts and are also targeting heavier and overage stock as well as cows.

Henry Burns said the British price has turned again and EBLEX are reporting a price lift to an equivalent of €5/kg for R grade steers.

He added that EBLEX also reported that an "eagerly anticipated uplift in demand does have potential to exert some upwards pressure on price".

Bord Bia described the cattle trade as mixed last week with trade for cows falling back, while prime cattle supplies remained steady. Market demand across the key export markets remains solid as the Christmas period draws closer.

Prices for steers and heifers were steady with base quotes under the Quality Payment System making €4.00-4.05/kg for steers and between €4.10-4.15/kg for heifers. The trade for cull cows has fallen, with quotes for O grades making between €3.05-3.25/kg.

For the year to date, steer and heifers continue to underpin rising supplies with cattle throughput running more than 8pc higher than 2012 figures.

In Britain, demand and supply remain evenly balanced. Demand for steak cuts continues to be sluggish. However, topsides and round cuts are trading reasonably well.

The colder weather over the last number of weeks has helped demand for forequarter cuts. Reported prices from the AHDB moved upwards this week, with the GB R4L steer price now making the equivalent of €5.02/kg incl VAT.

On the Continent, there was a slight improvement to the trade. Demand for forequarter cuts continues to gather pace. Trade for cuts such as fillets is building in advance of the Christmas period.

However, the market for other hindquarter cuts continues its seasonal decrease. In France, the R3 young bull remained stable at €4.02/kg inclusive of VAT, while the O3 cow price decreased by 6c to €3.53/kg. The R3 young bull price in Italy fell by 3c to €4.24/kg including VAT, while the O3 cow price fell by 3c to €2.80/kg.

Meanwhile, the latest European forecast indicates that beef output will remain tight this year with a modest recovery in 2014. Consumption levels are expected to remain sluggish.

DECLINE

Beef output for 2013 in the EU-15 is expected to be down by 2.2pc to 6.9m tonnes. Declines in beef output are expected in France and Italy, both amongst the top three beef producing countries in the EU-15, with output expected to fall by 3pc and 8pc respectively.

Declining beef output is also evident in Germany and Portugal in 2013. Moving out of the EU-15, production is noticeably down in Poland, down more than 12pc in 2013. However this is being partly offset by growth in Irish, Dutch and Belgian output.

Looking towards 2014, beef output in the EU-15 region is expected to increase by around 1pc. A number of countries that have experienced declines in production this year expect some recovery in 2014.

For example, French output is expected to increase by 2pc and Italian output is to level off following a significant decline in 2013.

In Ireland, production is expected to rise by around 4pc, while in the Netherlands, a 3pc growth in output is anticipated.

Overall, consumption levels within the EU are expected to fall by 2pc in 2013 to 7.1m tonnes due mainly to ongoing austerity measures across various member states, with the strongest falls anticipated in Italy and Portugal. Little change is anticipated in 2014.

The EU continues to be a net exporter of beef, but exports from January until August 2013 were down 15pc on last year's figures.

This decline is largely driven by a 28pc and 94pc reduction in exports to Russia and Turkey.

Exports to North Africa have increased, with trade to Algeria from January until August this year up more than 60pc on 2012 figures for the first eight months of this year.

Irish Independent



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