Farm Ireland

Thursday 14 December 2017

'It doesn't add up': How can demand for cattle be strong but beef prices poor

Weanling Bull Sales in Elphin. Keeping an eye on things at the mart. Photo Brian Farrell
Weanling Bull Sales in Elphin. Keeping an eye on things at the mart. Photo Brian Farrell
Martin Coughlan

Martin Coughlan

“We've been here before” was the comment from a couple of factory agents I spoke to at the weekend.

They were referencing the fact that last year factory prices were fixed for nearly three months, with bullocks on a base of €3.90/kg and heifers in and around €4.00-4.05/kg. Those prices from last year, especially for bullocks, remain aspirational at best.

This week bullock prices are welded to something between €3.75-3.80/ kg. The heifer is in a slightly better place with base prices continuing on €3.90-3.95/kg, with that €3.95/kg possibly getting a little easier to achieve.

One very experienced finisher claimed his bullocks coming out of the shed broke even “at best”. But that at 15c/kg less this year at €3.70-3.75/kg they were in danger of not only losing money but of moving into “negative equity”.

Moving possibly a little bit more into positive territory is the price of the cull cow might be a little firmer. While officially remaining at last week’s prices of €3.40-350/kg for Rs, €3.20-3.25 for O grades and Ps running from €2.90-3.15/kg, there was hint about yesterday morning that these prices, although entrenched, might on occasion be improved on.

The story with bulls is somewhat similar with quotes as of yesterday morning appearing to remain unmoved at €390- 395/kg for U grades, with Rs on €3.80-3.85 and O grades a further 10c/kg further back at €3.75-3.65/kg.

When you take all of the above and stir it around a bit what do you get? A beef trade that while not returning any great margin of profit for specialised finishers, appears to be hungry for cattle.

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In fact, although the weekly kill figures remain stubbornly in the 34,000 to 36,000 zone, the message from the factories appears to be, “keep ‘em coming”. As one man west of the Shannon told me: “They’ll take all they can get and they’ll kill all they can get.”

Which confirms that, Brexit or no Brexit, they are selling all they can get. However, the poor prices again this year is piling financial pressure and stress on many winter finishers.

If you think it is an issue for you, then take time out. Speak to friends or even strangers – sometimes they give the best advice. Be steady.

Online Editors