Farmers feel squeeze on beef prices as processors tighten grip
I had a conversation last weekend with a chef in a city hotel which told me a lot about how non-farming people can perceive issues in the farming sector.
This man told me he expected his beef wholesaler to put up his prices, as he imagined supplies were running low due to the drought. He reasoned that with having to feed round bales and grass supplies very tight, finished cattle had to be scarce.
I explained the actual situation: factories awash with stock and factory bosses having succeeded in reducing prices to farmers by over €150/hd in the last five to six weeks - so if anything it is less the chef should be paying going forward.
The processors now have control over not only pricing, but also conditions of sale. Prices continue to be hammered with quotes for bullocks now in the €3.90-3.95/kg price range, while heifers totter on €4.00-4.05/kg.
Once you've agreed these reduced prices you have to also navigate a raft of penal sales conditions, weight limits and age-profile penalties being the main ones. The question of when you can get your stock away has also surfaced.
Part of the problem, as we all know, is the continuing number of cull cows being off-loaded by the dairy sector: 9,282 for the week ending July 8, which is 1,732 ahead of the same week last year.
The number of young bulls going through the system was also up on 2017 by 929 to 4,111, while heifers were 415 ahead of last year. In contrast, bullock numbers were down by 942.
Last week's kill was 35,610, which is nearly 1,400 up on 2017.