Farm Ireland

Saturday 20 January 2018

Demand remains firm as supplies continue to tighten for beef farmers

Joe Healy

Unlike many Russians, Irish beef finishers do not have to worry about large amounts of savings locked up in Cypriot banks.

And even though cattle prices have improved considerably, massive savings will probably never be a cause for anxiety for most beef finishers.

However, as I have often said let's be grateful for small mercies because beef prices at the moment are at a level that most of us would not have imagined a few short weeks ago.

Supplies continue to tighten and demand remains strong. This is always a good combination from a farmer's point of view and at the moment the finisher is definitely in a good position, especially if he has quality assured (QA) stock fit for slaughter.

If his/her steers fit into this category then prices of up to 435c/kg are successfully being negotiated, while quotes range in the main between 425-430c/kg. The QA bonus of 12c/kg is paid out on top of each of the figures mentioned on suitable stock.

The best base I've heard is 437-440c/kg. The 437c/kg was paid in the northwest for QA in-spec steers killing out under 400kg. If over the 400kg, the all-in price is only 437c/kg. The 440c/kg was mentioned for a couple of plants with the southeast definitely included.

Base quotes for the heifers generally range between 450c/kg and 455c/kg but some deals of up to 460c/kg base are being done.

Again, if the heifer is out of the QA loop a few plants are trying to buy at 450c/kg so this 10c/kg difference is accentuated by the extra loss of the QA payment of 12c/kg. In other words there could be as much as 22c/kg of a difference between similar grade heifers.

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Deals of 430c/kg flat are being done for mixtures of R and U grade bulls. Quotes for the Us vary from 425c/kg to 437c/kg, with the majority of plants quoting between 425c/kg and 430c/kg. R quotes range from 420c/kg to 425c/kg, while the O grades are from 405c/kg to 415c/kg. Sellers should not have to take a penalty for heavier carcases. Clear this up before you sell because if a plant is sticky on it there are plenty of others that will deal with you.

The IFA's Henry Burns said that steer prices were at 430-440c/kg, with the heifers making from 450c/kg to 460c/kg plus the 12c/kg bonus. He said bulls were making up to 435c/kg.

The good heavy double muscled E grade cow is making up to 420c/kg, with the U grades at 400-410c/kg. The Rs range from 370c/kg to 400c/kg. O grades are making 350-370c/kg, while prices for the P cows run from 340c/kg to 365c/kg.

A strong trade was reported in Britain in advance of the Easter period. Strong demand for round and steak cuts remain evident on the market.

Trade for forequarter continued to be steady.

Reported cattle prices from the AHDB firmed during the past week, with GB R4L grade steers averaging at 389p/kg deadweight (equivalent to 477c/kg including VAT deadweight) for the week ended March 16. On the continent, there was little change to report, with the trade firm across most markets.

Overall, trade continued to be helped somewhat by ongoing tight supplies across the different key export markets.

Best demand is for hindquarter product. In Italy, R3 young bulls increased by 5c to €4.29/kg inclusive of VAT, while O3 cow prices remain unchanged at €3.14/kg.

Irish Independent