Farm Ireland
Independent.ie

Tuesday 23 January 2018

Factories keep price quotes at loss-making rates

Joe Healy

When starting the rounds yesterday morning to see what was happening in beef circles I, along with most beef farmers, was hoping for news akin to Mount Leinster Rangers' win in the Leinster club hurling final last Sunday.

Lightning has been known to strike twice they say, but not on this occasion as the beef processors with all their negative propaganda are successfully managing to keep quotes and prices at low and loss-making levels for finishers.

In a nutshell, the beef price in Britain is more than €5/kg compared to our €4/kg. Finishers would like this huge difference to be explained to them as opposed to the usual negative jargon from the beef factories.

That is the only constant from them since I began doing this column. I spoke to a farmer recently and he had calculated that it was costing him about €3.65/hd/day when everything was included. Finishers need to see some light at the end of the tunnel and an immediate rise which is very affordable and necessary would help confidence.

Steer quotes for the early part of the week is €4/kg and most of them are being bought at this, but there are some deals of up to 405c/kg being done. Having said that, there are lesser quotes being offered for overage steers and different again for non-Quality Assured (QA) stock. So instead of past days when farm factories offered one base price that farmers they either accepted or fought over, farmers are now being bamboozled with three different base prices. If the factories' aim is to confuse farmers, they are succeeding.

The quotes for the heifers are at 410c/kg but strong sellers are securing 415c/kg and on occasion up to 420c/kg. The best I heard for a mix of R and U grade bulls was 410c/kg. In the main, the U grades are making up to 410c/kg, with the Rs at 400c/kg.

STRUGGLING

Some plants, especially in the south, are trying to buy Rs at as low as 390c/kg with reports of quotes even below this. Quotes for Os are anywhere from 370c/kg up. Cull cows seem to be about as popular as the board of the Central Remedial Clinic. The tops are struggling to make 350c/kg. R grades range from 320-340c/kg, with the Os varying from 280-320c/kg. Prices for the P grades range from 265-290c/kg depending on where you sell.

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The total estimated kill for last week stood at just under 32,000hd, which was almost 1,000hd lower than the corresponding week last year.

In Britain, trade remains sluggish. Demand for steak cuts continues to be slow. Trade for round cuts remain reasonable. However, demand for forequarter cuts has strengthened. Reported prices from the AHDB edged upwards this week, with the GB R4L steer price now making 399.5p/kg (equivalent to €5.03/kg incl VAT) for the week ending November 23.

On the Continent, there was little change. Demand for forequarter cuts is solid. Trade for cuts such as fillets continues to build in advance of Christmas. However, the market for other hindquarter cuts continues to seasonally decrease.

In France, the R3 young bull price fell by 2/c to €4.00/kg including VAT, while the 03 cow price decreased by 8/c to €3.45/kg. The R3 young bull price in Italy increased by 4/c to €4.29/kg inclusive of VAT, while the 03 cow price fell by 6/c to €2.74/kg.

Meanwhile, ICSA beef chairman Edmond Phelan has said there is an emerging crisis of confidence in the beef sector, particularly linked to the increasing difficulty in getting young bulls slaughtered.

"The focus of the anger is not just about the fact that beef price is showing no signs of improvement, it is about the apparent lack of interest in cattle. Finishers who have specialised in young bulls are getting the signal that they are not wanted but this poses a real problem for quality cattle coming from the suckler herd," Mr Phelan said.

"The meat industry has been messing around for a while now saying that they want young bulls slaughtered at under 16 months. The reality is that heavy continental weanlings cannot be economically finished at that age given the cost of feed inputs on Irish farms and allowing for the fact that our strength is growing grass.

"Teagasc research confirms that 16-month bull beef is not economical. Farmers with bulls are discovering that there is just no point in buying them if there is this ongoing doubt about what is wanted. What is really frustrating is that factories forget all this as soon as beef gets scarce," he maintained.

"Irish finishers are vitally important to the suckler herd, especially as the export of weanlings has slipped in the past two years and the signs are not that positive for 2014. However, finishers are getting very pessimistic about what to buy given the unrealistic talk of 16-month bull beef, coupled with ongoing frustration over the completely arbitrary 30 month limit for steers and heifers."

Irish Independent