Farm Ireland

Sunday 27 May 2018

Factories are 'frantic' for cattle

Joe Healy

As one farmer put it yesterday morning: "If it's not negative, it's positive" - he was commenting on the cattle trade where, despite no real movement on prices, the fact that they were holding steady was quite positive given that the kill remained strong at 32,651hd.

This figure is almost 1,200 hd above the corresponding week last year. Quotes for the steers continue to be at €4.15-4.20/kg with sellers holding hard for the higher figure before agreeing to sell.

I did hear of some plants offering 10c/kg less for heavier steers killing out over 400kg. The base for the heifers runs from €4.25-4.30/kg and again, as with the steers, farmers are slow to sell under the higher amount especially when they are aware of up to €4.35/kg having been paid.

The best I heard reported for bulls was €4.25/kg for U grades while a flat price of €4.20 is common enough for a mixture of R and U grades and also for Rs on their own.

Some farmers are selling their Rs at €4.15. Prices for the O grades vary from €3.95-4.05/kg with most of them moving at €3.95-4.00/kg.

Meanwhile, some factories have upped their cull cow quotes, something that is often seen as a positive indicator of the beef trade overall. Depending on the grade, weight and flesh of what you are selling, prices can vary from €3.30-3.90/kg.

Commenting on the trade, the IFA's Henry Burns said prices are hardening again and factories are having to pay a base price of €4.20/kg to get steers and €4.30/kg for heifers.

He said that after a bit of levelling off on prices last week, there was more power and demand in the trade this week with factories very anxious for cattle with one agent describing the situation as "factories need the cattle frantically".

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Prices in Britain remain very strong with EBLEX reporting the steer price at £3.65/kg, equivalent to €5.11/kg incl VAT and the R4 grade steers making £3.75/kg which is equivalent to €5.25/kg.

The trade over the past week continued to slowly edge upwards, according to An Bord Bia, with demand remaining strong. Across our key export markets, trade was steady in the UK but mixed on the continent. Cumulative supplies for the year to date are back 1%. Supplies of prime cattle continue to be back 3% on year previous levels.

The trade in France remains steady. However, there has been some increase in competition on the back of competitively priced continental imports. Promotions are taking place on steak cuts and roasting joints. Prices for the R3 young bulls were running at €3.95/kg incl VAT while the O3 cows were selling for €3.16/kg.

In Italy, demand for most cuts continues to remain slow. The R3 young bulls were up 6c/kg to a VAT equivalent price of €3.93/kg. The O3 cows were making €2.62/kg.

Elsewhere, Meat and Livestock Australia have said that following two years of drought the total number of cattle in Australia declined by almost 3% in 2014, totalling 28.5 million head.

This decline in cattle numbers is expected to continue this year, with a further decline of 8.5% forecast for 2015.

Further decline in cattle numbers is expected in 2016 due to the smaller breeding herds, with fewer calves coming through the system.

Post 2016, the herd is likely to slowly commence rebuilding, and by 2020 it is anticipated that the herd size will be back to 27.9 million head, but still almost 1.4 million head below 2013.

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