Farm Ireland

Friday 14 December 2018

Beef Trade: It's time to start driving hard bargains as supplies begin to ease

Cattle in pens at a mart. Photo Brian Farrell.
Cattle in pens at a mart. Photo Brian Farrell.
IFA President Joe Healy
Martin Coughlan

Martin Coughlan

The question posed in this column last week by New Ross auctioneer Jim Bush was whether there was an imminent easing in numbers of cattle fit for slaughter. The answer appears to be yes as numbers dropped last week by nearly 2,000 to 36,100.

Meanwhile, IFA president Joe Healy laid out some very relevant figures of his own at the weekend. EU markets are 30c/kg above where they were this time last year; the UK price for an R3 steer is £3.76/kg which is equivalent to €4.45/kg.

And in relation to what cattle are left in the system, this year's kill is up 72,000hd to date on 2016. Over 38,000 young bulls are gone out of the system to Turkey and with carcase weights falling by 6kgs that's equivalent to 30,000 extra cattle the factories have to find.

Added together that fairly mops up the 100,000 extra cattle that were predicted to be in the system at the start of the year.

In the short term, factory bosses continue to have an iron grip on pricing with very little variation allowed from base prices of €3.70-3.75/kg for bullocks and €3.80-3.85/kg for heifers. I have heard of deals where a few cents more was forthcoming, but only after a serious struggle and the threat of that factory loosing the deal to some of their opposition.

This reflects the fact that at the consumer end the factories are feeding a very strong demand and need all the cattle they can get.

As bullock numbers ease back, the number of cull cows coming on the market is increasing and while heavy good conformation suckler cows are commanding in excess of €2.00/kg from factory agents at marts, the price at the factory gate to the farmer has dipped.

The best that can be said is the better R grade cows, while being quoted at €3.40/kg, will in places make €3.50/kg especially if a deal for a number of animals is dependent on it.

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O grades have slipped to between €3.30-3.10/kg with Ps now ranging from €2.90-3.10/kg. The story with the bulls is a little better with last week's prices in general holding at €4.00-3.95/kg for Us with Rs on €3.90/kg and Os on €3.80-3.75/kg.

These flat prices are for stock between 16 and 24 months. The base for under 16-month bulls continues to be €3.90/kg.

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