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Factories finally cede some ground on prices

A beef finisher I spoke to yesterday morning said that he regarded farmers like himself to be as great a risk taker as Nik Wallenda. Mr Wallenda is the American who walked blindfolded on a tight-rope between the two Marina city towers in Chicago on Sunday evening.

Hopefully, for the farmers' sake, their risk factor might have begun to decrease as factory quotes show some positive movement on steers, heifers and young bulls.

A 5c/kg move is evident. In some instances it is 10c/kg while there also appears to be more flexibility on age with the base held at the same level for steers up to 36 months.

Some plants are offering the same base for all ages provided the carcase weights are not extremely high.

We shouldn't be too excited about this.

The base should always have remained the same regardless of age. That's what farmers accepted when the Grid was introduced by the processors five years ago, but they moved the goalposts especially over the past year. The original plan was that the QA bonus would reward the younger stock.

Steer quotes and prices for the early part of this week are generally in the 370-375c/kg range while the heifers range from 375-385c/kg.

Do not sell softly.

Tough sellers are actually refusing to sell at some of these prices and anticipate another rise shortly - pointing to tighter supplies, keen demand and above all ample room for improvement when the UK price is taken into account as up to 60pc of our beef is going into that market.

It is vital if your cattle are over 30 months that you know what's available out there before you sell. I did hear of a base of 380c/kg offered for underage steers in the north-east yesterday.

Young bulls, depending on grade are making from 320-390c/kg. The Us are making anything from 375-390c/kg, R grades from 360-380c/kg and Os from 325-345c/kg. Good deals on mixes of the top two grades are being negotiated as supplies are very scarce.

The estimated total cattle kill for last week from the Department of Agriculture was 25,968hd. The Bank Holiday and the IFA protest reduced the kill days to three and would have led to this reduced figure.

The best of the cull cows are making from 350-360c/kg, while the Rs are mainly selling at 340-350c/kg. Prices for O grade cows range from 320-330c/kg with the Ps at 310-320c/kg.

Following an emergency meeting of the IFA Executive Council in the Irish Farm Centre in Dublin last Sunday, a decision was taken to sanction further action against the beef factories.

ICSA president Patrick Kent has said that the 30-month requirement and realistic weight limits for bulls must be on the table for the two weeks of intensive negotiations on specs which are to follow Wednesday's beef roundtable meeting. "There is no justification for continuing with these restrictions, given that is it is clear that they are not necessary for the marketing of Irish beef," he said.

An Bord Bia reported that the cattle prices showed little change over the last week. The majority of steers were purchased at a base price of €3.65/kg on the Quality Payment System with selected lots making up to €3.70/kg. Heifers were being purchased on average at €3.70/kg with selected lots of heifers making up to €3.75/kg. These prices exclude the €0.12/kg bonus which is payable on in-spec QA animals. Prices paid for O grade cull cows are generally making between €3.15 to €3.25/kg. Cumulative supplies for the year to-date are 11% or 136,000 head above the figures for the corresponding period last year currently standing at 1.36 million head. Throughput of prime cattle is up by 10%.

Meanwhile, our Minister is currently leading an Irish trade mission in China. Beef is not a traditional meat item in China and the market remains in its infancy. China's consumption of beef has been historically low (3% of overall meat consumption).

The beef sector has, therefore, not been a strategic focus for government in the context of domestic food security. However, Minister Coveney yesterday announced a major step forward for Irish beef access in China, stating it could become our most important export market after Britain.

Speaking from China ICMSA John Comer said that the announcement that an inspection team from China will visit Ireland in December is a welcome development and will hopefully lead to full access for Irish beef to the Chinese market.

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"I sincerely hope that we can convince the Chinese authorities of our excellent standards and hopefully develop a strong market for Irish beef in China where demand for beef is expecting to grow strongly over the next five years," he said.


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