The announcement that McDonald’s have closed all their restaurants in Ireland and the UK comes as a serious blow to the beef trade particularly the Dawn Group who prided themselves as a major supplier to McDonald's.
This I’m sure is not the end of the road by any means for this relationship but right here right now its bad news for both companies and all their suppliers not just their beef farmers.
There will be a ripple effect across the entire Irish beef industry in the short to medium term as the industry absorbs this news of that there can be no doubt. A ripple effect to add to all the other ripples that we saw surface last week as the hotel, pub and restaurant industries across both Ireland and Europe were forced to shut up shop.
In real terms what the factories have left is the supermarket trade.
People still have to eat meaning that with restaurants and fast food establishments closing the appetite of nations will now have to be catered for exclusively by the domestic kitchen.
To that end, my sources tell me that factories are keen for “supermarket beef” with the emphasis on Angus and Hereford types plus your lighter 280-330kg continental heifer. This also means that once again the trade is turning its back on heavy cattle or anything out of spec.
So where are we on prices? Anything bought in advance from last week on the bullock side appears to be operating from €3.60-3.65/kg with heifer’s 5c/kg better at €3.65-3.70/kg.
However, as this week progress, the expectation is that both bullocks and heifers will ease back to no better than €3.60 and €3.65/kg respectively.
After their fall of 20c/kg two weeks ago cull cows steadied last week with O grades at €3/kg and better P’s €2.90-2.80/kg.
There is now an expectation that cow prices may take another hit, however. Trade for bulls also steadied last week with prices for U’s marked at €3.60/kg while R’s remained at €3.50/kg, both prices dependent on overall cover. O grades varied with continentals floating around the €3.40/kg mark while some Friesian O’s were little better than cow price at €3.30-3.20/kg.
Granted at this time it seems inappropriate to ask the question yet it is a question that has to be asked. In the light of the supports being given to other sections of industry is there room in the equations of Government or the EU for some sort of direct farmer support to be given at this time for those caught with cattle to kill? Is there a possibility that meaningful supports will be given to the industry as a whole?
One factory agent I spoke to reflected, “In 2018 we had a drought then last year farmers shot themselves in the foot with the protest, and now this. When will it end?” Good question.