Farm Ireland

Saturday 17 February 2018

Cattle farmers urged to reject reduced prices from factories

Joe Healy

While the Lions' pack had a great day last Saturday in Australia, their successful efforts at pushing hard to gain metres and penalties still hardly matches that of the beef factories here in Ireland to push quotes and prices downwards.

Later in this article you will read a very noteworthy point from IFA's Henry Burns regarding the factories' soundings in the Food Harvest 2020 report and their targets of 40,000hd/wk. Well, if we were at that figure now, I dread to think of what they would be willing to pay for cattle.

Last week's estimated kill was only 26,650hd and the processors have pulled the quotes by 5-10c/kg. If there was another 14,000 cattle being killed where would the prices have settled?

At the moment, most of the stock being killed are being done so at last week's prices. But as you will see from the table, steer quotes are back by at least 5c/kg, with heifers and bulls showing drops of up to 10c/kg on quotes.

Factories are generally offering 430c/kg for steers, with some farmers securing base prices on the grid of 435c/kg. The 12c/kg quality assurance (QA) was paid on top of this.

In the north-west, I heard of R-grade steers killed yesterday for 450c/kg, including the QA payment.

Heifer quotes were at 440-445c/kg. This is a far cry from the lofty heights of the 470-480c/kg they were at just four short weeks ago.

Can finishers afford this massive drop from one month to the next? Absolutely not.

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On a well-fleshed heifer this equates to a loss of more than €100. You don't need to possess the 175 IQ of Wimbledon ladies' champion Marion Bartoli to work out that farmers just cannot afford such losses.

It is a similar story with the bulls, where the best prices I heard of had slipped to 440c/kg. Quotes and prices for the U grades varied from 430c/kg to 440c/kg, with the Rs at 420-425c/kg. Some finishers were getting 430c/kg flat for a mixture of R and Us.

I heard of a range from 390c/kg to 405c/kg for O grades, with the 405c/kg price including Friesians.

The €4/kg seems to be a thing of the past for cull cows, with 390c/kg now the best around for top quality heavy U grades. The Rs are varying from 360c/kg to 370c/kg, while prices for the O grades run from 340c/kg to 355c/kg in the main. P-grade cows are making from 320-340c/kg.

With the farmers very busy at silage and hay and little or no pressure to move cattle, IFA national livestock chairman Henry Burns said farmers selling cattle should demand last week's price and reject any price cuts from the factories.

"Despite the propaganda from the factories, the supply situation is very tight, demand is very strong and farmers should not part with cattle easily," said Mr Burns

The IFA livestock leader said with the beef price in our main export market in Britain very strong at €5.00/kg, the actions of the meat plants in pulling cattle prices were totally unjustified.

Mr Burns said in the Food Harvest 2020 plan, factories had claimed they wanted to increase beef production and they could easily sell 40,000 cattle per week.

But he added this week, procurement managers and agents had told farmers they were full up of cattle, although the kill was only 28,000 head. He accused the factories of limiting the kill and backing up numbers in order to pull back prices.

The IFA livestock leader said it was very clear from the lack of competition in the trade in the last two weeks that Minister Simon Coveney needed to take immediate action on cattle prices and get more boats cleared for more live exports.

"Good progress has been made in reopening the Libyan market and we now need more boats and more exports."

The latest Bord Bia report stated that the British trade remained unchanged as favourable weather conditions continued to help drive demand for steak cuts.

On the continent, Bord Bia reported that the beef trade remained firm across and continued to be helped by ongoing tight supplies across the different key export markets.

Strong demand was evident for hindquarter product, with best trade for fillets and striploins.

Irish Independent