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Saturday 15 December 2018

Beef Prices: Cull cow numbers up as squeeze continues

 

Martin Coughlan

Martin Coughlan

The pressure on factory cattle prices continues to mount. Figures from Bord Bia show that at 9,038 for the week ending June 30, the number of cull cows going into the food chain are up almost 20pc on the same week in 2017.

The irony is bullock numbers for the same week were back 11pc, and while heifer numbers were back just 213, they were still back. Bulls on the other hand saw their number surpass their kill for the last week of June 2017 by 526 at 4,302.

Overall, however, when you roll the numbers of bullocks, heifers, bulls and cows together, you find that at a kill of 33,332, you are only 348 ahead of the kill for the last week of June 2017.

I deliberately put these figures up before quoting prices this week because I believe it is important that we have some yardstick to measure exactly where we're at.

You could argue that in some ways we are in a false market because of the distortion caused to the supply chain by those extra cows.

I spoke to some in the mart and fattening business over the weekend who maintain that it's important to look at the long game.

Their point being that a lot of those extra cows would have come into the system at the end of the year anyway, and all that's happened is they are being got rid of earlier. I don't disagree, but if it was all about logic, this would be a simple game.

Moving from speculation on how the trade maybe in three to four months, and back to the reality of the here and now, yesterday morning saw quotes for both bullocks and heifer fall another 5c/kg while cows fell 10c/kg.

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Bullocks yesterday were being quoted in general at €3.95/kg and heifers were on €4.05/kg. In both cases, 5c/kg more was rumoured to be available if you had "the right ones", i.e. in spec and R grade or better. At the other side of the equation, I spoke to one agent who was attempting to pull the base for bullocks on to €3.90/kg, while trying heifers at €4.00/kg.

That's a bit like saying England will get to the World Cup final next weekend without having to play Croatia in the semi-final. You cross only one bridge at a time.

The cause, as we all know, of the current price pressure are those extra cows which yesterday morning saw their quoted prices fall for the third week in a row. This week's reduction is of the order, as mentioned above, of 10c/kg. This now leaves most O grade cows around the €3.20/kg mark, with better Ps are on €3.10/kg, while the lesser straight-from-the-parlour P grade falls back to, depending on cover, anything from €2.90kg to whatever the factory are willing to give.

Bull prices also see a further squeeze with under 24-month U grades now not getting up above €4.00/kg, with Rs on €3.90/kg and Os back to between €3.80-3.70/kg.

IFA president Joe Healy has called on Minister for Agriculture Michael Creed to publicly acknowledge that the current price pull by factories does no justice and is very disrespectful to the very positive future he envisaged following the opening of the Chinese and other new markets.

"The Minister needs to get his priorities right at this difficult time, and get on the farmers' side. That means, right now, pulling the factories aside and explaining to them that their profits are dependent on co-operation from all sides, farmers, vets and the Department."

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