Farm Ireland
Independent.ie

Tuesday 23 October 2018

New pricing structure as factories turn on the charm

 

Martin Coughlan

Martin Coughlan

Around the turn of the year, I heard that some factory bosses had instructed their agents to find out what cattle their clients had in sheds.

The instruction was concise: not what fit cattle finishers had, just what cattle they were feeding long term.

As of last week that long term has become short term; and as a result, the factory boys have gone on a charm offensive and are pricing aggressively, and on occasion imaginatively.

While headline prices are always welcome and give everyone something to aim for, the 'price spread' as reported from a number of sources often more accurately reflects the reality for the majority of those selling.

Last week the price spread among factory agents remained steady: most plants were still quoting last week's €4.10kg for bullocks, with the top of the pyramid being €4.15/kg.

Base prices for heifers continue to move between €4.15-4.25/kg.

Prices for plainer cattle - ie, the Friesian-type bullock - have seen an unusual development in some quarters: the 'flat price grid'.

It works like this: you start by deciding the minimum price you are willing to take on the grid and put it as a requirement when fixing the base price.

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With your cattle now effectively flat-priced you can hopefully look forward to securing grid-based bonuses on at least some of your stock.

It's a uniquely Irish and clever solution to a tricky problem: how to buy cattle off the grid without going off the grid.

Last week also saw sixteen to 24-month bulls continue to see U-grades make €4.20-4.15/kg, with Rs on 4.10-4.15/kg, and the odd O-grade you might turn up should yield you around 4.00/kg. For those with under 16-month bulls, the base remains steady at between €4.10/kg and €4.15/kg.

On the cull cow front, both factory and mart prices remain rock solid.

R-grading cows in the factories in general run €3.70-3.80/kg, but with an overall of €3.60-3.85/kg O-grades range from €3.40-3.60/kg. The better P-grades are on €3.20-3.40/kg, with poorer-quality P-grades slipping below €3.00/kg.

Although this is a shorter working week, the emphasis for factories continues to be on the weight of actual beef they can source as opposed to just bigger numbers.

On the numbers side, however, Bord Bia figures show that the overall kill for the year to the end of April is up 3.8pc or 21,004 animals at 568,522 as opposed to last year's 547,518 for the same period.

While heifer and cull cow slaughterings are up 5pc and 6.9pc respectively. Young bulls are up 4.3pc, steers have fallen 0.4pc or 752hd so far this year.


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