Farm Ireland

Thursday 22 March 2018

Factories are still paying well above quoted prices

Joe Healy

Rivalries, whether they are current like Bolt versus Blake, Phelps versus Lochte, or ongoing ones like Kilkenny and Tipperary or beef finishers versus beef processors are part and parcel of what makes life interesting.

However, in the case of the latter it can be quite annoying and discouraging when there is seldom any let up despite the fact that, for the good of the industry, both should be working together.

With the weekly kills remaining small at just 24,400 last week, the factories are anxious for stock and willing to pay above the quotes, despite their insistence in keeping the quotes at the low levels of the past few weeks.

This sees the steer quotes remain at 395-400c/kg generally. However, many finishers are securing prices of 405c/kg, with good in-spec bullocks commanding up to 410c/kg in places. Similarly, the heifer quotes are in the range of 405-410c/kg, with prices at 410c/kg available everywhere outside the extreme south where the lower quote is coming from. Farmers in the northeast have got from 415c/kg to 420c/kg for their in-spec females.

The best I heard for the young bulls was 420c/kg for the Us and 410c/kg for the R grades. Quotes for those grades are generally at 410c/kg and 400c/kg respectively, with the O grades being quoted at 390c/kg. Dairy bred bulls have made up to 400c/kg to travel north.

The IFA's Henry Burns said that with production costs now at their highest ever, finishers were bargaining hard to get prices well above the quoted figures in order to make a slight profit.

Good cull cows have made up to 370-375c/kg. Quotes for the top cows range from 360c/kg to 370c/kg, with the Rs at 350-370c/kg. O grades are being quoted at 340-360c/kg, while 330-350c/kg is being offered for the P+ types.

There was some stabilisation in finished cattle prices last week, according to Bord Bia. Trade has been helped by favourable exchange rate movement between sterling and the euro which is improving the competitiveness of Irish beef exports.

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Prices quoted for R grade steers under the Quality Payment System were mostly between €4.00-4.05/kg, while quotes for heifers are generally in the range of €4.10-4.15/kg. These prices exclude the 6c/kg on in-spec quality assured stock. O grade cull cows continue to make €3.40-3.56/kg.

Cattle supplies this year are running more than 15pc or 131,500hd behind last year's levels.

In Britain, the beef trade is reportedly steady as lower supplies matched demand. Similar to previous weeks, weak demand for manufacturing beef is evident.

Reported cattle prices from the AHDB for GB R4L grade steers eased to Stg348p/kg deadweight (equivalent to 468c/kg including VAT deadweight) for the week ended July 21.

On the continent, trade across most of the key markets is reportedly stable as demand is being matched by existing supplies. In France, Irish steer hinds are still making between €5.40-5.50/kg. R3 young bulls in Germany increased by 6/c to €4.02/kg, with O3 cow prices increasing by 6/c to €3.60/kg. In Italy, R3 young bulls are making €4.05/kg, while O3 cows are making €3.10/kg.

Elsewhere, the New Zealand government announced last week it will be supporting a programme to produce high-quality marbled beef off grass, by combining specific high-marbling genetics with the country's strengths in pastoral agriculture.

The investment partnership is expected to be worth $23.7m over seven years, with the Ministry for Primary Industries providing NZ$11m (€7.15m) and the balance coming from commercial companies.

The NZ approach will be to finish these cattle on grass, while retaining a high proportion of the marbling expressed in the Japanese-style grain feeding systems.

USDA Prime grade is the most widely recognised standard for beef marbling internationally. Less than 3pc of the entire US beef production reaches USDA Prime.

Indo Farming