Farm Ireland

Wednesday 23 January 2019

Beef base prices dip after a buoyant Christmas

16/12/2017. Dowra Mart. Last of 2017
Lot 30
Weight 646K
DOB 21/12/15
Breed CHX Heifer
Price 1515
Photo. Brian Farrell
16/12/2017. Dowra Mart. Last of 2017 Lot 30 Weight 646K DOB 21/12/15 Breed CHX Heifer Price 1515 Photo. Brian Farrell

Johnny Logan won the Eurovision in 1980 with 'What's Another Year'. While his victory brought great joy to the country, the message in the song was quite downbeat as it dealt with feelings of helplessness.

However as 2017 slipped into the new dawn of 2018 those in the winter cattle fattening business were toasting the arrival of another year.

Prices over the Christmas and New Year surpassed those of the same period the previous year by anything from 30-40c/kg. Highs of €4.10/kg for bullocks were claimed by some in the run up to the New Year which is a long way ahead of last year's €3.70-3.75/kg.

Heifers sold for €4.20/kg, ahain 30-40c/kg ahead of last year's price.

Prices for your 350kg carcase are €105-140/hd ahead of last year. That's the good news.

However, those reported highs of €4.10/kg for bullocks and €4.20/kg for heifers were short lived as factories finished out their year being able to ease prices back to €4.05/kg for bullocks and €4.15/kg for heifers.

As of yesterday those prices still hold but factory resistance is apparently increasing with many plants now quoting a €4.00/kg base for bullocks with the base for heifers at €4.10/kg.

Yet those with stock to sell are generally getting 5c/kg above these prices, but the message is clear: factories want to get back full control of the system.

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The trick from their point of view is to create a feeling uncertainty, quote a lower base and then see what happens.

But supposing the farmer still isn't happy and doesn't sell. Factory bosses don't always view this as a bad thing especially if they have a window of slackening demand.

Against that has to be measured the fact that most men fattening cattle for the winter market fall into the hardier seller bracket and don't frighten easily.

So instead of backing up meaningful numbers of cattle, the factories could just as easily turn off the supply.

At the same time I think, despite stories of January being a "weak" month for beef sales, you don't turn off supermarket demand over night.

Cull cows

Cull cow prices are if anything improved over the last two weeks with R grades reported to be as high as €3.70-3.75/kg.

Depending on numbers and cover, O grades are reported as selling from €3.40/kg for small or single numbers to €3.55-3.60/kg for those with bigger offerings.

Demand for bulls remains strong with R grade Friesian bulls selling for €4.00/kg with Os in the €3.90-3.95/kg bracket.

Again it's a case of numbers helping make the deal, especially for the O grades. Under 16-month bulls are selling off an R grade base of €4.00/kg while those under 24-months see Us on €4.10-4.15/kg with Rs at €4.00-4.05/kg.

In relation to "base" prices auctioneer Jim Bush of New Ross sent me the Oxford English dictionary definition of the word base: "The lowest part of something; the part on which a thing stands".

It's a useful definition to remember should discussions on a review of the grid actually get under way this year.

Indo Farming