Farm Ireland

Thursday 22 February 2018

Beef boom delivers some festive cheer

Tightening cattle numbers and soaring demand see prices harden

Declan O'Brien

Declan O'Brien

Beef farmers secured a pre-Christmas bonus this week as tighter cattle numbers and stronger demand for stock drove prices.

The past two weeks have seen a dramatic turnaround in the cattle trade, with prices soaring as factories scrambled for scarce supplies of finished heifers, bulls and steers.

Prices have increased sharply with returns for heifers and bulls up by more than €75/hd over the past month, while steers made an additional €60-70/hd.

The battle to source numbers has also left the quality payment system (QPS) reeling, with more factories being forced to buy off the grid as farmers have taken full advantage of the stock shortage. Stronger demand on the British market, where Tesco is running a half-price promotion on round cuts of beef, and a sharp fall-off in supplies have been the main drivers of the recovery.

Tesco's aggressive sales pitch has left suppliers of the British multiple hunting for stock to fill orders. In addition, Northern factory buyers have been more active across the South over the past few days.

Good quality heifers were generally making 336-342c/kg this week. However, some finishers have been paid close to 350c/kg for quality-assured animals. This is an increase of more than €75/hd on just three weeks ago.

Prices for young bulls and steers have also taken a serious bounce. Farmers report far stronger demand for bulls, with returns tracking those on offer for heifers.

Base quotes for steers range from 314c/kg to 320c/kg, but with plants struggling to get numbers, much more is actually being paid.

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Cow prices have also strengthened significantly, with up to 275c/kg being paid for O grades and close to 295c/kg for continentals.

Factory buyers blamed the shortage of stock on the cold snap but privately admitted that many farmers have already disposed of cattle which would traditionally have been carried over the winter.

This trend was reflected in the massive kills of the past four months.

However, slaughter figures have fallen sharply since early December.

Last week's kill was around 29,500hd, which is around 5,500hd back on the same week last year.

Meanwhile, ICSA general secretary Eddie Punch has predicted a dramatic drop in the availability of beef cattle next year.

He pointed to several key indicators:

  • There were 151,000 fewer calves born in 2009 compared to 2008;
  • A swing to dairy inseminations in 2008, which led to almost 40,000 more dairy heifers being born in 2009 instead of beef-type animals;
  • Live exports in 2009 were more than 60,000hd higher than in 2008.

Mr Punch predicted 270,000 fewer prime cattle would be available for slaughter in 2011 compared to this year -- a drop of 5,000hd/week.

"This is a highly significant drop and is likely to put considerable upward pressure on price," he claimed.

"Farmers must realise that cattle will be extremely scarce in 2011 compared to 2010 and, therefore, it must be the objective of all farmers to resist factory propaganda and insist on much higher prices."

Irish Independent