Farm Ireland

Thursday 22 March 2018

Beef trade: Farmer doubts on hopes of contracts

Joe Healy

One farmer I rang regarding prices yesterday morning said to me that "if they didn't improve a lot, our Tanaiste, Mary Coughlan, wouldn't be the only one missing out on a holiday abroad". Unfortunately, this week's quotes will not have him rushing to his travel agent as plants are at best only holding steady.

Talk of forward contracts as of now is regarded by farmers, agents and factory men as pie in the sky, and that even if one group is serious about it then that is totally undermined, when a base of 330-340c/kg is being touted. Farmers are totally in agreement with IFA president John Bryan that anything less than 350c/kg is just not worthwhile.

Evidence of any contracts are like positive national exchequer stories in that they are so scarce, but there is a rumour of one farmer being offered 336c/kg and 350c/kg for his males and females just after Christmas.

But we are a long way off this figure today as base quotes from around the country almost all fall into the 294-297c/kg bracket for the steers, with the heifers at 300-303c/kg. Factories mentioned at those figures include members of the big three as well as Moyvalley, Liffey, Slaney and Kildare. Due to a scarcity of underage steers, some plants are offering up to 300c/kg for the younger types while sticking to the original base for the overage animals. Prices of 319c/kg were reported for good R and R+ heifers in the northeast last week. Over in the northwest, prices have slipped in Donegal with in-spec R and U grades making 311 and 319c/kg respectively. Out-of-spec stock are 11c/kg back from this.

The best I heard for young bulls was the 308c/kg and 319c/kg for the Rs and Us from Dawn Grannagh. Clonee and Rathkeale are next best for the Us at 314c/kg with the Kepak plants at 302c/kg, one of the best of the rest for the Rs.

Thereafter, the general run for the R grades runs from a low of 294c/kg in Moyvalley up to 300c/kg. The young bulls grading U are more often than not being quoted in a range of 300-308c/kg.

While the top quotes and prices for the cull cows vary from 252-266c/kg, I heard of a farmer in the northeast being offered 280-294c/kg if he had good quality heavy stock killing out over 400kg. The plainer grade quotes range from 230-252c/kg.

The cattle trade was largely unchanged last week, according to Bord Bia, despite relatively strong supplies being evident. There was little change reported in market demand almost everywhere.

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Quotes for R-grade steers under the Quality Payment System were stable, with the base reference price between 297 and 302 c/kg. Heifer prices also remained steady and were generally in the 302-308c/kg range. These prices exclude the six cent on in-spec Quality Assured stock. Prices for O-grade cows have eased slightly, with quotes now generally ranging from 241 to 252c/kg.

In the UK, trade remained unchanged. Trade for steak cuts is reportedly holding at better than expected levels, while demand for forequarter product continues to firm.

Reported cattle prices from the AHDB were steady with GB R4L grade steers averaging at Stg 275p/kg dw (equivalent to 339c/kg dw including VAT) for the week to September 18.

On the Continent, the beef trade showed little change. Promotional campaigns are underway, which is helping maintain volumes. Further evidence of seasonal switching to forequarter cuts was reported. In France, Irish steer hindquarters are making 452c/kg, while in Germany, R3 young bull prices increased by 3/c to 324c/kg, with O3 cow prices remaining unchanged at 246c/kg inclusive of VAT.

Irish Independent