Farm Ireland
Independent.ie

Monday 27 February 2017

Tightening supplies leads to a slight rise in prices

Joe Healy

Champion: JJ O'Connor from Ballinhassig with 'Laurel Elm Stonewall', the winner of the Maiden Heifer class at the annual agricultural show at Belgooly Co Cork. Photo: Denis Boyle
Champion: JJ O'Connor from Ballinhassig with 'Laurel Elm Stonewall', the winner of the Maiden Heifer class at the annual agricultural show at Belgooly Co Cork. Photo: Denis Boyle

Farmers will be reasonably pleased with the positive vibes coming from the beef trade, with tightening supplies helping a slight rise across the board. Some plants are extremely reluctant to move on quotes but are having to adopt a different attitude in order to close deals.

But the soft seller continues to leave money behind. Yesterday morning I came across a man who had agreed to sell his steers at the base of €4.15/kg that he was quoted. Another finisher not too far away had secured a base of €4.25/kg. It was an even bigger difference in the heifers where some farmers had accepted a low €4.20/kg for their stock while others had bargained successfully for €4.35/kg. This price difference of 15c/kg is worth €50 on a 330kg carcase. In general, finishers who know their job are getting between €4.20-4.25/kg base for their bullocks with €4.25-4.35/kg being got for the heifers.

If you have a mixture that includes under and over 30 month old stock, you should still be able to command a high base across the board and just lose out on the QA bonus for the overage lots.

Top grade bulls have made up to €4.30/kg, with mixes of R and U grades making up to €4.25/kg. The Us range from €4.20-4.25/kg, with tough sellers holding out for the €4.30/kg. The Rs are making from €4.15-4.20/kg, while the O grades are selling for €3.95-4.00/kg. Young bulls under 16 months have made up to €4.15/kg base on the grid. When the quality assurance (QA) 12c/kg payment and the grade bonus of say 18c/kg for bulls grading U= is added on it brings the final price up to €4.45/kg. Commenting on the trade, the IFAs Henry Burns said that tight supplies have put the ball back into the farmers' court, with factories paying up to €4.50/kg base for Hereford and Angus heifers.

If, as is often said, cull cows are a sign of the trade, then things look good at the moment. I heard of mixes of P and O grade cows making between €3.85-3.90/kg, with the top quality cows making up to €4.05/kg. The bottom line for farmers with beef to sell is that it is vital that you shop around and get a few plants to quote. Be clear on everything, including age, mixes, weights and anything else that could surface to have a negative effect on the final outcome.

Bord Bia data shows that the majority of steers were being purchased at a base price of between €4.15-4.20/kg on the Quality Payment System, while heifers were being purchased on average at a base of between €4.20-4.30/kg, with selected lots achieving higher prices. These prices exclude bonuses payable on in-spec QA animals. Prices paid for O grade cull cows were generally making from €3.55-3.75/kg. Cumulative supplies for the year to date are down around 4pc on supplies for the corresponding period last year.

In Britain, R4L grade steers were averaging €4.95c/kg. Trade was reported as relatively slow for most cuts, particularly for roasting cuts. The R3 young bull price in France was down 1c to €3.84/kg, while the O3 cow price was up 3c to €3.45/kg. In Italy, the market remains steady but demand is still slow due to the milder weather. The R3 young bull price was down 7c at €4.00/kg and the O3 cow price was up 1c to €3.03/kg.

 jhealy@ independent.ie

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