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Sunday 21 January 2018

Dark arts deployed by factories in an effort to flush out cheap stock

14/7/2017 Roscommon Mart Celebrating 58 years in Business.
Lot Number. 22 ( six in Lot)
Weight AVG 734K
DOB 17/3/15 to 26/5/15
SEX M
Breed CHX LMX
Price €1830
Photo Brian Farrell
14/7/2017 Roscommon Mart Celebrating 58 years in Business. Lot Number. 22 ( six in Lot) Weight AVG 734K DOB 17/3/15 to 26/5/15 SEX M Breed CHX LMX Price €1830 Photo Brian Farrell
Martin Coughlan

Martin Coughlan

There are many tricks to be learned in the cattle business and one of the neater ones from the factories’ point of view is the self fulfilling prophecy.

It works a bit like this: factory bosses want to buy beef cheaper and target finishers by spreading sto­ries of falling or potentially falling prices.

Last week, for example, I know of finishers who received unsolicited phone calls from factory agents touting base prices of €3.95- 3.90/kg with talk of possibly worse to come this week.

When challenged on the price, the story was simply repeated.

Obviously factories are sending very clear signals on where they want the price.

To make that happen, they need farmers to buy into the whole idea that if you put off selling stock you risk taking a lower price.

However, if you take that lower price because you’re afraid of what might happen you’re in effect helping to fulfil the factories predic­tion/prophecy as to where the price they “predicted” was going to go in the first place.

Did all this negative PR work?

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In a word yes — the gener­al run of farmers with fit or close to fit stock coming off of grass are selling. Reports from the south indicate that some factories secured supplies at €3.90/kg. In other areas, €3.95/kg was given for bullocks last week. The heifer has also seen the sharp edge of the price cutting with prices this week reported to be back at €4.00/kg.

The cull cow, who has had a very good innings over the summer months, is also starting to see pressure being applied to her price.

Potential price reductions here are in the order of 10c/ kg which would see R grades on €3.50/kg Os on €3.30/kg and Ps in the €3.20’s/kg.

I say potential price cuts as factories are still keen at marts for cows and out of spec bullocks.

Numbers

The message appears to be that if you’ve got the num­bers your local factory may actually have the money you’re looking for.

Bull prices have also eased back with under 16-month stock being quoted between a base of €3.95-400/kg on the grid while those between 16 and 24 months see upgrades on €4.00/kg with Rs on €3.90/ kg while O grade stock are back at €3.80-3.75/kg.

I’ve also had reports that deals were done last week at €4.00/kg flat for U and R grade over age bulls.

The factory trade has appeared to change very quickly in the last 10 days from a position where farm­ers were fighting strongly to stop the price for bullocks from falling below the €4.00/kg mark to hoping that at €3.90-3.85/kg there isn’t far more to go before it bottoms out.


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