Farm Ireland
Independent.ie

Tuesday 16 January 2018

Fall in quotes is not sustainable from a finisher's point of view

Joe Healy

Quotes have fallen by 10-15c/kg today, compared to the same day last week. On a 400kg carcase, this equates to a loss of €40-60/animal and is simply not sustainable from a finisher's point of view.

What's driving this fall and is it justified? The processors are taking advantage of the very wet conditions but this is absolutely not justified as far as most people are concerned. Last week's kill rose by 450 head of cattle but it was still small compared to previous years, at a total of 24,800 animals.

There are also rumours that this total included a significant number of light and under-finished cattle being slaughtered within this total kill, so the overall meat total could be lower than the numbers suggest.

Steer quotes are between 410-420c/kg for the northern half of the country, with some of the plants in the south quoting as low as 405c/kg. Bullocks killed in the northwest for the early part of this week at least are making up to 432c/kg for the R grades and 444c/kg for the U grades. Similarly, the heifer prices remain at 438c/kg- 450c/kg in this area, while elsewhere the quotes vary from 420-430c/kg. I also heard of Friesian bullocks making 415c/kg flat.

bulls

Bulls have taken a bigger hit, with some plants reducing their quotes by as much as 20c/kg for the U grades. In discussions about bull versus steer prices, I expect the negative tone from certain quarters at this stage but maybe a positive angle would serve the industry better.

Why not say that steer beef should be so many c/kg more than bull beef rather than saying that bull beef should be so much less than the steers?

In any case, the quotes and prices for the U grade bulls run from 420-430c/kg, with the Rs at 410-425c/kg. O grade bulls range from 400-414c/kg. With those variations, it goes without saying that you need to shop around before selling because even though the deal was probably done since last week, there is a mix of good bulls being killed this week at 438c/kg flat.

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Reacting to the downward pressure being exerted by the processors, IFA livestock chairman Henry Burns accused the factories of using the very difficult weather conditions to drop prices despite the exchange rate, markets and supplies all being favourable to a strong trade.

A gap has also opened up between factories in the prices being paid for similar types of cows. Depending on where you go, you could get anything from 360-390c/kg for your top U grade cows and from 350-390c/kg for the Rs.

O grade prices vary from 350-376c/kg, with O+ cows making up to 382c/kg in Donegal Meats. Quotes and prices for the P+ cows run from 340-370c/kg.

The cattle trade remained steady last week, according to An Bord Bia, in response to ongoing tight supplies. The competitiveness of Irish beef exports continues to be helped by a favourable exchange rate between sterling and the euro.

Quotes for R grade steers under the Quality Payment System were making from €4.18-4.25/kg. Heifers were being quoted at €4.28-4.35/kg. These prices exclude the 6c/kg on in-spec Quality Assured stock. Cow prices were steady, with O grade animals making between €3.61-3.70/kg.

To date, cattle supplies are running almost 16pc or 123,300 head below last year's levels.

In the UK, the beef trade is reportedly well balanced with market demand being matched by supplies. Similar to previous weeks, both round cuts and steak cuts are slower to move while demand for forequarter product remains steady.

Reported cattle prices from the AHDB have firmed with GB R4L grade steers averaging at Stg 349.2 pence/kg deadweight (equivalent to 460 c/kg including VAT deadweight) for the week ended June 30.

On the continent, trade across most of the key markets is still being affected by unusual weather patterns throughout Europe.

In France, Irish steer hinds are making between €5.58-5.78/kg. R3 young bulls in Germany are back 6/c to €3.95/kg, with O3 cow prices remaining unchanged at €3.34/kg. In Italy, R3 young bulls are making €3.87/kg, while O3 cows are making €3.51/kg.

Indo Farming