Farm Ireland

Friday 23 February 2018

Beef sector has come a long way after a rocky year

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Joe Healy

I read over the weekend that in Easter 1915 the hit songs were 'It's A long Way to Tipperary' and 'Along the Rocky Road to Dublin'. Beef prices have certainly travelled along many rocky roads, and it is definitely a long way from where it was this time last year.

Finishers are arguing that prices are close to €1/kg behind those in Britain, our largest market. However, when compared to the situation this time last year, everything is so much more positive at the moment with factories and agents actively looking for cattle, anxious to kill as soon as the deal is agreed, and little or no talk of cuts for heavy carcases.

The general run of prices I reported for heifers and steers for this week last year was €3.95/kg, while farmers selling this week are getting €4.30/kg and €4.20/kg respectively. As expected, there is a much bigger difference with the bulls where the current prices of €4.15-4.25/kg for R and U grades is some 60-70c/kg ahead of where they were twelve months ago. On a 400kg carcase this equates to a positive difference of between €240-280/hd, not to mention the removal of the stress associated with trying to sell bulls last year. Cull cows are also improved by levels similar to the bulls with a tops of €4/kg at the moment compared to €3.35/kg back then. The numbers are definitely helping the situation as agents are beginning to feel the effects of tightening supplies and the stats are indicating that this is likely to be the case for most of the year ahead.

As you will see from the table the quotes for the steers range from €4.15-4.20/kg with the higher price being negotiated in a number of plants. The heifers are at €4.25-4.30/kg. One agent mentioned that more and more finishers are demanding the €4.30/kg and will not sell without getting it this week. I heard of €4.25/kg being paid for a mix of R and U grade bulls while €4.20/kg appears to be commonplace for similar mixes. Farmers have actually got this figure for Rs on their own even though a few plants are only quoting €4.15/kg. Quotes and prices for the O grades are at €3.95-4.00/kg. Cull cows, depending on grade and weight are making from €3.50-4.00/kg. Prices for the R and U grades range from €3.80-4.00. The Os and Ps are making from €3.50-3.75/kg. The IFA's Henry Burns encouraged farmers to bargain hard in order to maximise the value of their stock as prices being paid can vary between plants. He added that steers are making €4.20/kg, heifers €4.30/kg, bulls up to €4.25/kg and a tops of €4/kg for cows.

Bord Bia described the trade as continuing to slowly edge upwards on the back of robust demand and tightening supplies. Little change has been reported across our key export markets.

The majority of steers were being purchased at a base price of around €4.15/kg on the Quality Payment System while heifers were being purchased on average at a base of €4.25/kg, with selected lots achieving higher prices. These prices exclude bonuses payable on in-spec quality assured (QA) animals. Prices paid for O-grade cull cows are generally making between €3.45-3.60/kg. Cumulative supplies for the year to date are down around 5,000 head on supplies for the corresponding period last year at around 401,000 head.

In Britain, reported cattle prices from the AHDB have firmed with GB R4L grade steers averaging at €5.15/kg. But the market has eased with supplies adequate to meet demand. Demand for forequarter and manufacturing beef remains weak but trade for steak cuts is steady albeit slow.

In France the market remains steady with recent promotions centred on rumps, sirloins and diced beef, while in Italy there was little change in the market. The R3 young bull price in France was at €3.92/kg, while the O3 cow price was up 3c to €3.34/kg. In Italy the R3 young bull price was unchanged at €4.10/kg, while the O3 cow price was up 10c to €2.94/kg.

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Bord Bia's Eoin Kelly said that a relatively steady supply of cattle has been recorded at export meat plants, with some tightening in supplies reported in recent weeks.


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