Having made numerous phone calls to factory agents and those close to the trade yesterday and over the weekend, I was left with a myriad of conflicting information, views and opinions.
Despite a number of agents quoting bullocks at €3.65/kg they also went on to say that numbers of finished stock in their areas appeared to have tightened.
The one thing that was clear however was that demand from the processors continues strong with one source telling me that a number of factories last week were reported as having worked Saturday.
Add to this reports that sellers of nicely finished better Friesian stock got flat prices varying from €3.50-3.60/kg over the last number of weeks and it’s obvious that demand has not slackened to any great extent.
So why have factory bosses decided to try their hand at €3.65/kg? As always the issue appears to be numbers, not the immediate fact that Kildare Chilling are temporarily out of the equation, although that doesn’t help.
Nor does the possibility that going forward kill numbers may be restricted should more stringent Covid protocols be introduced in other plants.
Leaving aside those possibilities the reality is that the last week of July saw 35,245 cattle slaughtered at exporting plants up from 34,872 the previous week.
While not a huge jump the steer kill at 16,500 was up just short of a thousand on the previous week while the heifer kill at 9,346 was up 532. On the other side cull cow numbers fell 1,026 to 7,019 which helps explain why their prices remained unchanged last week at €3.20/kg for R’s, €3.00-3.10 for O’s and €3.00-290/kg for better P’s.
As I’ve said before a quoted price is often only the beginning of the conversation and with cull cows holding plus the weather warm and settled I just don’t see any quote below €3.70/kg for bullocks and €3.75/kg for heifers cutting the mustard with experienced sellers.
Quotes for young bulls also appear to be unchanged with U grades continuing on €3.60-3.70/kg, R’s on €3.50-3.60 and O’s 3.50-3.40/kg.
On the live export front, the total number cattle exported for direct slaughter to the north in July fell back from 3,570 in June to just 1,757 as improved factory prices in the Republic during July helped southern agents outbid their northern counterparts at marts.
However, Sean Brosnan of Gortatlea in Kerry told me that he noticed that after a recent lull his northern men were once again very active last week as they took the southern competition out of significant numbers of factory types.
Looking at that 3,570 figure for June it was equivalent to one factory killing 162 animals on each of the twenty-two working days during that month.
All of the above and more go into the mix when factory bosses sit down to work out their long term pricing strategy. And part of that strategy must surly encompass the continuation of those who fatten cattle remaining in the game, particularly those who winter finish. However, this year has been unlike any other.
Many marts, for example, are currently reporting stronger than normal turnouts raising the question would a falling factory price have the same impact on mart prices if numbers were less this back end.