Grim outlook for beef farmers as factories 'fearless' in turning screw
Factory prices are still being pressurised by high numbers presenting: last week's figure was 39,961.
The result is factory bosses continue to be fearless in selectively hitting the various divisions as they deem fit. This week the pain will be most keenly felt by those with bulls, O and P grade cows and cattle over 36 months.
Yesterday factories eased bull quotes by another 5c/kg as the increasing supply of cull cows eats into processors' need for heavier carcases for the manufacturing beef market. This latest cut has left U grades on €3.80-3.85/kg, with Rs variously priced from €3.70-3.75/kg and O grades down around €3.50-3.60/kg, O grade Friesians are less.
This week last year I was reporting the price range for young bulls as running from €4.10/kg for U grades back to €3.80-3.85/kg for Os. On a 400kg carcase that's upwards of a €100 less year on year.
Add in increased meal, straw and silage costs plus the prospect of seeing your animal cut 10c/kg if he goes over 420kg, and many believe the job makes no sense whatsoever.
While many tried to ease their replacement buying price back over the last number of months in an attempt to stay viable, few finishers could have foreseen where we are now.
Prices for in-spec stock remain stuck in gear at €3.75/kg for bullocks with heifers continuing on €3.85/hd, with the Carrigans plant in Donegal back in line with the general consensus on heifers at €3.85/kg. Their quote for in spec 320-380kg bullocks continues to be 5c/kg above the opposition at €3.80/kg. At a time when supplies are normally tightening and factories turn a blind eye to such issues as age and weight when pricing, this year the story is much different.
Quotes I was given by several different sources yesterday for 36-plus-month animals ranged from €3.50-3.60/kg. And just to rub salt in the wound beware of weight limit penalties above 400-430kg. If you're not sure ask.
The cull cow is also cut again with O grades slipping back to €2.60-2.80/kg and Ps falling to €2.40/kg; R grades have held at last week's €3.00/kg. Some plants with specific supermarket orders chose yesterday not to quote for cows, concentrating on sourcing in-spec heifers and bullocks.
All in all, the entire outlook for those with cattle feeding remains grim in the short term.
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