Beef Prices: Factories gain upper hand, but numbers may still be in finishers’ favour

Falling numbers set to halt price pulls but bigger problems loom

Photo: Brian Farrell.

Latest factory quotes

Photo: Brian Farrell.

Martin Coughlan

June 20 2022 07:56 AM

‘We all get a turn. Now the factories are getting theirs — however long that will last.”

That was one insider’s assessment of the trade. He feels that things could swing back in favour of the finisher if supplies from the sheds dry up.

As always, it will be down to the numbers, and those numbers have been falling slowly but steadily over the last month. The Department’s Meat Market report for the week ending June 12 shows the kill at just over 30,000, with the previous week at 31,109 and the week before that 32,030.

The kill for the week ending May 22 was 33,140.

The overall kill to date is 11pc (75,371) ahead of the same period for 2021 at 772,267, but the supplies are clearly slowing. If this trend continues, July could be very interesting.

As it is, factories have succeeded in reducing quotes by 10-15c/kg in the last 10 days. Bullocks are on a base of €5.10-5.15/kg with heifers on €5.20/kg.

Interestingly one source reckons these reduced prices apply more to any grass cattle coming through the system as opposed to shed cattle, which he claimed remain on €5.20/kg for bullocks and €5.30/kg for heifers.

Cull cows have also slipped, by 10-20c/kg: Rs are now around €4.90/kg, although those with numbers should still not accept less than €5.00/kg.

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Coloured Os are on €4.80/kg with Friesian Os and P+s possibly less.

Young bulls under 16 months are operating off a base of €5.25 /kg, with some €5.30 also reported. U grade bulls up to 24 months range from €5.30-5.40/kg.

If quotes held as they are, few farmers would complain, but will the factories be happy to sit on their hands?

As to where prices may go this autumn, factory bosses plan from a long way out. So a big short-term concern for those fattening is whether processors can reduce base prices.

However, a far bigger worry should be whether factory bosses will be able to eliminate flat pricing and force sellers back onto the grid long term.

Given that over half the cattle in the country come from the dairy sector, this would represent a major victory for the processors in their attempts to buy beef cheaper.

It would drop the price of all O and P grade bullocks and heifers by 12-36c/kg below the base price, and those grading from R+5 to P+5 would be down 18-54c/kg.

Putting scale to the potential savings for processors, the Department’s Beef Carcase Classification report records 56.7pc of all steers slaughtered last year as grading O or P, with a further 0.4pc of all grades rating fat score five.

That’s 362,161 out of a total steer kill of 634,257 that fell 12-54c/kg below the base price in 2021.

On the heifer side, 204,103 suffered similar penalties out of a total of 436,118 slaughtered at exporting plants last year.

Beef Prices: Factories gain upper hand, but numbers may still be in finishers’ favour

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