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The squeeze is on as the factories shave beef prices

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24/1/2018
Sticking together at Athenry Mart.
Photo Brian Farrell

24/1/2018 Sticking together at Athenry Mart. Photo Brian Farrell

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24/1/2018 Sticking together at Athenry Mart. Photo Brian Farrell

With last week's cattle kill creeping up over 34,000, the effect of high numbers on prices continues.

The factories haven't quite succeeded in shaving another 5c/kg off the price paid to farmers for cattle - bringing bullocks back to a base of €3.90/kg and heifers onto €4.00 - but the pressure to do so is definitely on. The current price pull, now stretching into a month, has left every winter finisher wondering what has happened the beef market since Christmas.

Newly elected ICMSA beef chairman Des Morrison voiced finishers' anger by stating. "The facts are that the cattle kill is down about 8,000 head per week compared to pre-Christmas. Exchange rates are broadly the same. There have been no negative market developments so farmers are legitimately asking the question, what is the basis for the current price reductions?"

He's not the only one. Everyone I've spoken to recently from finishers to mart managers are seriously concerned

The factories' position is that as long as numbers continue strong they don't need to give anymore than they are doing.

Bord Bia figures show the overall kill for the first three weeks of 2018 running at 4,142 head, 4.5pc, ahead of the same three weeks in 2017 with an increase of 9.5pc or 2,607 in the heifer kill accounting for well over half that increase.

Some agents were pointing out over the weekend that prices are 10c/kg above where they were this time last year and that if farmers paid too much for cattle at the back end, that's not the factories fault. One agent I spoke to took that discussion a step further by saying. "You never see factory bosses giving their agents a blank cheque to buy cattle, unlike farmers".

Both bull and cow prices are also seeing a squeeze with bulls in particular taking a hit. Prices for bulls up to 24 months now read as follows: Us, €3.95-4.00/kg, Rs €3.85-3.90 and Os at €3.70-375/kg. Under 16-month bulls to go on the grid are being quoted on an R grade base of €3.90/kg.

Cull cow prices, while being squeezed, remain largely unchanged.

Last week's prices of €3.50-3.60/kg R grades, O grades in the region of €3.40/kg and Ps between €3.00-3.30/kg are broadly unchanged at plants that specialise in this type of stock.

Even with those cull cows possibly a little easier, it must grate with the cattle men that cull cows that could be any age are only 25-35c/kg behind prime well fed, well cared for bullocks and bulls. Are these figures the future of the trade in 2018?

Indo Farming