Farm Ireland

Saturday 21 July 2018

Attack the best form of defence on beef prices

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Martin Coughlan

Martin Coughlan

There are times in every football match when you have to concede the ball to the opposition. That's when the strength of your defence is tested.

At present farmers with factory fit cattle to sell are finding that if you don't tackle hard when negotiating on price, factories will not be slow to put you on the back foot.

In that scenario, the factories will shoot for goal in the range of €3.95/kg for bullocks and €4.05/kg for heifers. However the €4.00/kg for bullocks and €4.10/kg for heifers is more realistic on a majority of deals are being done.

Above these prices, sellers in stronger positions with bigger numbers can expect to click an additional 5c/kg on both bullocks and heifers making €4.05/kg and €4.15/kg possible.

Factory bull prices continue steady again this week with a grid base price for under-16 month stock of between €3.95-4.00/kg.

While some factories are quoting a €3.95/kg base, that €4.00/kg figure is accepted as being the norm. Bulls up to 24 months are also steady with Us at €4.10-4.05/kg and Rs on €4.00-3.95kg.

The situation with O grades is a little more complicated. Demand for stock has pushed even O grade Friesians on to a price of €3.90/kg but reports indicated yesterday that factories were inclined to split the O grade when pricing. Those animals that fell into either an O+ or O= grade got that €3.90/kg price, while any in the O minus grade were 5c/kg back at €3.85/kg. P grade bulls are being bought at €3.75/kg.

Cull cow prices continue on a steady course. At least one factory who specialises in manufacturing beef paid up to €3.80/kg for good R grades last week and then coughed up €3.60/kg for Os. In general, though it is as you were with Rs making from €3.70-3.60/kg, Os on 3.40-3.50 and Ps on €3.35-3.20/kg.

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Warning flags were flying this week as Brazilian President Michel Temer said that Mercosur and the European Union were "a step away" from signing a free trade agreement.

Meat Industry Ireland warned now was not the time to be finalising a Mercosur deal.

"We have an EU 28 market that is currently 102pc self-sufficient on beef. By the time this deal would take effect, which would be after the UK departure, we will be facing an EU-27 market that is 116pc self-sufficient.

"Any tonnage figure agreed now by the Commission would not be revised downwards post-Brexit and hence it is totally inappropriate to proceed with the deal at this time while so much uncertainty still exists," an MII spokesman warned.

ICSA's beef chair Edmund Graham fired a shot across the bows of the factories last week in relation to reports of cuts being imposed on weights exceeding 380kg.

"We are aware of at least one factory only paying up to 380kg and cutting 10c for every 20kg thereafter," he claimed.

"Beef is relatively scarce at present and factories are anxious for cattle, yet still we are seeing heavy handed weight limits being imposed.

"These kind of weight limits are totally unworkable for continental bred sucklers and will also take away any chance of the beef finisher making a margin."

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