Farm Ireland
Independent.ie

Wednesday 26 July 2017

Wide gap between quotes and prices paid

Beef

Joe Healy

Angela Merkel was not the only one trying to work out a deal this week. Factory agents were frantically trying to secure adequate stock from the continuing scarce supply.

Last week's estimated kill was down to 27,000hd and, for the second week running, showed a fall of well over 3,000 animals compared to the same week last year. As a result, factory agents were under severe pressure to source enough cattle.

Not for the first time, the official quotes bear little or no resemblance to what can actually be secured for cattle. If you are foolish enough not to price around, you are losing a hatful of money at this point in time.

I know of farmers who have sold heifers for a base price of 360c/kg to a plant on the same day that it freely paid a base of 375c/kg to another farmer. The difference of 15c/kg on a 300kg carcass translates into a gain or loss of €45/animal.

Just remember that at this point in time it is a seller's market, with the farmer holding the cards. It is vital that you maximise this opportunity.

Donegal had to increase its price by 11c/kg over the past week to stop the haemorrhage of stock out of the county. It is now paying 378c/kg and 370c/kg for in-spec U and R-grade heifers respectively, with steer prices 3c/kg back from those figures. Young bulls are making 370c/kg for U grades and 361c/kg for R grades.

Range

Elsewhere, most of the factories have increased their quotes by at least 6c/kg.


Steer quotes are in the 350-358c/kg range, with heifers varying from 355-364c/kg.

However, farmers who bargain are getting steer base prices of 360-365c/kg, while the heifers would seem to be commanding a base of 370-375c/kg. Overage heifers are making 360-364c/kg.

All types of deals are being done and some of the big three plants are willing to buy off the grid and pay a flat price if that is what the farmer wants.

The best I have heard for good, young R and U-grade bulls is 380c/kg flat. U grades are freely commanding 375-378c/kg, while Rs are making 364-370c/kg despite quotes being 6c/kg lower at 358-364c/kg. Quotes for Os vary from 344-350c/kg but most are selling for 350c/kg upwards.

IFA livestock chairman Michael Doran said farmers were rightly refusing to sell at the quoted figures and were in a strong position to bargain for and secure a base of 375c/kg.

The cull cow trade has also moved in the right direction.

Donegal is at 325c/kg for top-quality types over 320kg carcass weight and 319c/kg for O+ cows. Elsewhere, quotes for P+ grades seem to be running at 280-302c/kg and O grades at 294-308c/kg, with the best cows making anything from 308-320c/kg.

The cattle trade improved again last week, according to Bord Bia, as both prime cattle and cow supplies continued to tighten.

Quotes for R-grade steers under the Quality Payment System were €3.56-3.64/kg. Heifer quotes were at €3.64-3.70/kg. These prices exclude the 6c/kg on in-spec quality-assured stock. The cow trade remained strong, with O-grade cows typically making €2.91-3.02/kg.

Indo Farming