Farm Ireland

Friday 15 December 2017

Factories dig in on price despite increasing costs

Joe Healy

There are no Oscars for the beef processors this week as they are holding a tight grip on the quotes and keeping them at the levels of recent weeks. With the cost of feed having risen so much over the wintering period, beef finishers could be heading the same way as the Green Party.

Quotes for steers remain on a general base of 330c/kg regardless of geography. Donegal, as is the norm, is better if you have in-spec stock where 347c/kg and 358c/kg is to be got for the R and U grades respectively with 3c/kg more available for the heifers.

The out-of-spec stock are 11c/kg behind those figures. Elsewhere, the heifer trade seems to be a bit more solid than the steers and while most are continuing to quote 336c/kg, many farmers are successfully holding out for much more with actual prices of 342-350c/kg being negotiated. Competition between a few plants in the north-east have helped prices in that region. Reports suggest that the south-east is one of the better places for young bulls where up to 350c/kg was said to have been paid in Slaney.

The general quote for the R grade bulls is 336c/kg with the Us at 342-345c/kg. Quotes for the O grades range from 319-330c/kg. I did hear of bulls from the midlands travelling to the west with 345c/kg available for the Rs and up to 355c/kg for the Us. All of those figures show that there are big variations between what farmers are being paid for the same type of stock, with as much as 15c/kg of a difference to be seen in the prices paid for R grades.

Even at a carcass of 350kg, this results in a loss or gain of over €50/hd. The moral of the story is to shop around and make sure you are maximising the value of your stock.

IFA livestock chairman, Michael Doran, said that with beef prices in the UK increasing by 6c/kg this week to an equivalent of 350c/kg, there is real potential for Irish prices to rise by a minimum of 10c/kg.

Top prices I heard for cull cows was 308c/kg. Most plants are quoting a range of 280-291c/kg with another 11c/kg being quoted for the top quality cows. P grades are making from 266c/kg upwards. Donegal are paying 300c/kg for the O+ cows over 320kg and 305c/kg for the best.

An Bord Bia reported that the cattle trade across all categories remained steady last week as ongoing lower supplies at export meat plants offset a sluggish European beef trade.

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Quotes for R grade steers under the Quality Payment System were generally in the range 330-333c/kg. Heifer quotes were running at 336-340c/kg. These prices exclude the 6c/kg on in-spec Quality Assured stock. The cow trade remained unchanged with O grade cows typically selling for between 274-286c/kg.

In the UK, trade remained unchanged. Reported cattle prices from the AHDB eased slightly with GB R4L grade steers averaging at Stg283.4 pence/kg dw (347c/kg incl VAT) for the week ended February 19.

On the Continent, trade remained somewhat sluggish with best trade reported for forequarter cuts. In Germany, the R3 young bull price is making €3.76 with the O3 cow price making €2.70/kg. Irish steer hinds were making around €5.26/kg. In Italy, the R3 young bull price was averaging €3.70/kg, with O3 cows making €2.70/kg.

Since the beginning of this year, finished cattle supplies at export meat plants have tightened with supplies up to February 19 down by around 16,000 head or 7pc. During the first month of 2011, cattle supplies at meat export plants were 4pc lower at 114,800 head. Combined steer, heifer and cow supplies were down by 11pc to 90,500 head while the continued rise in young bull production helped to partly offset some of the decline. During the month, young bull supplies were up by 35pc to 21,100 head. Last month, the decline in cattle supplies was more pronounced.

Indo Farming