Farm Ireland

Monday 16 July 2018

Beef processors need to explain UK differential

A lot of the talk in political circles at the moment is to do with the possibility of a reshuffle at the cabinet table and I think it is pretty safe to say that the majority of us wouldn't mind seeing some of those in situ being shipped off.

The standards in place should not prove too difficult for the new personnel to at least match and hopefully surpass. However, if ever a reshuffle was required in any section, it is in the beef industry.

If only something could be done with some of our processors. Their absolute refusal to move with any sort of positivity on quotes since Christmas has, and continues, to cost beef farmers a fortune. According to figures from Bord Bia, the R4L steer is making the equivalent of 340c/kg in the UK, while R3 young bulls are making 338c/kg in Germany and 403c/kg in Italy. Meanwhile, our base price or R4L equivalent continues to be quoted at between 291c/kg and 295c/kg or an average of 47c/kg behind the figure our same processors are willing to pay the farmer across the water. Put this on a 375kg carcase and the Irish farmer is taking €176 less for his animal.

Speaking at the IFA meeting on the new QPS in Tullamore last December, the most the MII representative on the night could come up with on extra costs was around €80.

OK, we will accept your figure but please pass on the other €96 to us. Currently we must make do with quotes remaining static at a range of 291-295c/kg as a base for the steers and 297-300 for the heifers.

The one bit of good news is that with signs of supplies beginning to tighten this week, some farmers are bargaining successfully for more with a number of plants, especially in the east, paying 300c/kg for the bullocks and 308c/kg for the heifers. And yes, there is a need to repeat yet again to bargain and get a price before you sell and make sure you get your quality assurance premium of 6c/kg on top of the price.

Factories at the quotes mentioned above include the AIBP, Dawn and Kepak plants as well as Liffey, Moyvalley, Dunbia, Slaney and Kildare Chilling. Despite what they might be saying to you, they seem to be very anxious for and actively seeking stock this week as numbers are drying up.

Donegal killed in-spec cattle yesterday at 314c/kg for the Rs and 322c/kg for the Us, with young bulls in those grades making 302c/kg and 311c/kg respectively.

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I had a very interesting meeting last week with a group of UK beef farmers who had come over here in conjunction with Dunbia and Eblex to visit Grange, Dunbia and Carnaross mart and a beef farm. A number of them had bought store cattle in the Irish marts last year and were extremely happy with them. They were definitely returning to buy again over the next month as they felt they could get much better value for money here than in the UK. During their visit they also wanted to learn more about the mechanical grading system and the ongoing research projects in Grange, particularly the research in relation to rubber versus concrete slats as most of them were finishing cattle on the straw-bedded sheds.

The general quote for cull cows continues to range from 235-246c/kg with most plants quoting a top price for the better types of between 252c/kg and 266c/kg, even though I heard of as high as 280c/kg being paid in certain plants.

Bord Bia reported little change to the cattle trade last week, despite the ongoing strong level of supplies, as steer prices improved marginally while the cow trade was unchanged. This reflects the relatively stable demand evident across most markets.

In the UK, a steady trade was reported. Cattle prices from the AHDB for the week ending February 13 showed a slight easing with GB R4L grade steers averaging Stg 283.3 pence/kg dw (equivalent to 340c/kg incl VAT dw).

On the continent, the best trade continues to be for forequarter cuts with ongoing promotional activity helping trade levels. In France, Irish steer hindquarters are making around €4.42/kg. R3 young bull prices rose by 1/c to €3.38/kg in Germany, while O3 cow prices fell by 3/c to €2.31/kg. In Italy, R3 young bull prices are making €4.03/kg, while O3 cow prices are making 2.16/kg.

Irish Independent