Farm Ireland

Thursday 14 December 2017

Be sure to battle on price as factories desperate for stock

Joe Healy

I was contacted by a farmer last week to say that the ICSA beef price goal of €4/kg was "some crazy target" and that we shouldn't get carried away but, then, beef has been edging closer and closer to that farmer's idea of a crazy target.

I know of at least one finisher who sold his heifers at a base of 360c/kg and ended up getting up to 390c/kg after bonuses for some of his top heifers. I also heard of one plant asking a big producer if €4/kg for heifers at the end of May would be enough to secure them. It is definitely a sellers' market at the moment, with the prices for all categories of stock hardening. Factory men are extremely active, calling to farms and also around the marts.

Base quotes for steers are generally in the 342-347c/kg range but finishers are freely securing a base of 350c/kg if they are willing to do any bit of bargaining. Heifer base quotes are at 350-355c/kg, with most producers securing a minimum of 355c/kg plus the quality assurance bonus.

Remember to watch the pence/lb selling price versus the c/kg payment as some plants do not always get it right, while others seem to always round the conversion downwards. For example, £1.26/lb converts to 352.8c/kg but I know of a farmer where this was rounded down to 352c/kg.

Donegal Meats is paying 367c/kg for in-spec R-grade heifers and 375c/kg for the Us, with the steers at 3c/kg less.

R-grade young bulls are making 347-353c/kg, the Us are at 353-361c/kg and the O grades are making 330-336c/kg. There are strong rumours doing the circuit that flat prices of up to 364c/kg are being negotiated for bulls.

Top-quality cull cows are at 322-330c/kg, R grades are making 308-319c/kg, O grades are in the 294-308c/kg bracket and the P+ cows are making 280-291c/kg.

The IFA's Michael Doran said finishers need to ensure that they are getting the best price available, as there are significant differences between prices being paid -- and he urged farmers to get a few different quotes before deciding where to sell.

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He added that improvements in beef prices in Northern Ireland were attracting a number of beef cattle from the Republic and this was pressurising the Southern processors to increase their quotes and prices to secure adequate supplies.

The beef trade pushed on further last week, according to Bord Bia, as demand was helped by stronger returns for fifth-quarter cuts combined with steady demand for steak cuts across the key European markets as consumers finished stocking up for Easter.

Quotes for R-grade steers under the Quality Payment System were at €3.45-3.50/kg, while heifer quotes were running at €3.53-3.60/kg. These prices exclude the 6c/kg bonus on in-spec Quality Assured stock. The cow trade also improved as the O-grade cow price typically made €2.91-3.02/kg.

The trade in Britain was reportedly improving as the run into the holiday period began. Supplies remained tight overall, with relatively tight import supplies helping trade. Demand for steak cuts continued to be firm, with trade for forequarter cuts steady.

Reported cattle prices from the AHDB increased slightly, with GB R4L grade steers averaging Stg304.6p/kg deadweight (equivalent to €3.63/kg including VAT deadweight) for the week ended April 16.

On the Continent, the R3 young bull price in Germany averaged €3.56/kg, while the O3 cow price was back 4/c to €2.84/kg.

In France, Irish steer hinds made €5.26/kg, while in Italy, the R3 young bull price averaged €3.51/kg, with the O3 cow price up 4c/kg to €2.86/kg.

Indo Farming