Beef price lift worth €1m a week to farmers
Average increase worth €35/hd as bidding wars break out between agents
Livestock farmers received a €1 million boost in returns this week as cattle prices hardened on the back of tighter supplies.
Factory quotes for finished bullocks and heifers have increased by between €35 and €50/hd over the last month as strong demand and a shortage of finished cattle combined to drive up prices.
The trade for cows and bulls has also improved over the last week.
The price lift is worth in excess of €1 million per week to the sector. This figure is based on an average increase of €35/hd for the 32,000 cattle killed each week.
Steer prices hit a base of €3.95/kg this week, with talk of €4/kg being paid in some cases. This is an increase of 15c/kg or around €50/hd since early March.
Meanwhile, heifer quotes have increased to €4.05-4.10/kg, with rumours of up to €4.15/kg being paid following a bidding war between two plants for a consignment of cattle.
Returns on heifers have strengthened by €35-45/hd since the start of March.
Factory agents are finding it much more difficult to get stock over the last week, and there are increasing reports of bidding wars between factories for suitable stock.
Angus Woods, IFA national livestock chairman, said cattle prices were going in the right direction but that winter finishers needed at least €4.10/kg to break even.
The IFA representative said factories were under pressure for stock and were offering fancier prices and deals on transport or half transport and no clipping charges to secure supplies.
"Where agents were bidding on stock and going back the next day to buy, they are now finding the cattle are gone at a higher price. To get stock, the factories need to put their best offer forward first up," Mr Woods said.
Mr Woods said R and U grade bulls were making €4.00/kg, while there was a significant jump in cow prices, with P grade cows making up to €3.30/kg, R grades on €3.55-3.60/kg, and €3.65-3.70/kg paid for U grades.
Industry sources predict that cattle supplies are likely to remain tight until the middle to the end of June, giving scope for prices to rise further.
One trade observer predicted that strong supplies of quality stock would not resume until cattle finished off grass started to come on stream from the middle of June.
"In the meantime, processors will have to keep contracts supplied," he said.
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