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Saturday 17 November 2018

Foyle Meats continue to turn up the heat on prices

Elphin Mart Annual Show & Sale of Weanling Bulls. Lot Number 52H 1st Prize Charolais. Weight 300Kg. DOB 22/4/2018
Sex Male. Breed CH. Price €1240
Photo Brian Farrell
Elphin Mart Annual Show & Sale of Weanling Bulls. Lot Number 52H 1st Prize Charolais. Weight 300Kg. DOB 22/4/2018 Sex Male. Breed CH. Price €1240 Photo Brian Farrell
Martin Coughlan

Martin Coughlan

Another week has slipped by with prices for steers continuing to remain static at €3.75/kg and heifers on €3.85/kg among the majority of factories.

Foyle Meats in Donegal, however, continued to turn up the heat on the opposition yesterday with their €3.85/kg base for bullocks and €3.95/kg for heifers.

Reports of 5c/kg above that general run of €3.75/g for bullocks being available among more southern-based plants is in all probability true but those getting that 5c/kg are possibly ticking a few factory boxes that aren’t on any grid.

The issue of whether it pays a factory better on occasion to buy cattle that are over 30 months, and that, as a result, don’t qualify for the 12c/kg quality assurance payment while still originating on quality assured farms raises some interesting points.

Firstly not all contracts being filled by the processors require under 30-month beef, the big requirement for many outlets is that the beef comes from quality assured farms.

Doing the figures on a 380kg over 30-month carcase versus an equivalent under 30-month animal, the factory saves .12c/kg x 380kgs = €45.60.

Once you compare two similar grade and weight carcases but where one qualifies for quality assurance and the other doesn’t but both originate from quality assured herds, the saving on that €380kg carcase to the factory expands to €91.20.

The word on the ground is that those with animals from QA approved farms around that 340-380kg mark but over 30 months are the ones as likely as any to squeeze a little bit more out of the factories on the base price.

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There are reports that factory buyers happy to pay that bit more on the base especially if the stock involved are better O grades.

It’s all about the relationship between QA, base price, weight and grade.

Cow prices slipped last week by between 5-10c/kg, with R grades reported as not achieving any more than €3.30/kg, Os back to €3.10/kg and P+s ranging from €2.80-2.90/kg.

Bulls seem to have settled at €3.95-4.00/kg for U grades, with Rs on €3.85/kg, while O grades are on €3.70/kg.

Grid

Meanwhile, I noted that in last week’s five-page special on the future of suckling farming that Cormac Healy of Meat Industry Ireland (MII) stated that in relation to the QPS, “producer calls have been made for the price differentials between grades to be increased”.

The ICMSA has been calling for years for such a review of the QPS, and last year Paul Nolan of Dawn Meats also went on the record as looking for the beef grid to be overhauled.

While I believe that a review of the entire system of factory payment is long overdue, it is my belief that farmers should however be wary of selective changes prompted from within the industry when it comes to changing the grid.

For now, however, the advance made by the Carrigans plant in the broadening of the Quality Assurance base is a real price dividend and shows that some within the processing sector have been listening to farmer concerns.

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