Farm Ireland

Thursday 14 December 2017

Farmer-factory relations strained as prices drop

Joe Healy

Whatever about the connection between our Taoiseach and Anglo in the past, the connection between beef farmers and the factories is pretty sour at the moment.

The downward pressure on price shows no signs of abating. In slightly over a month, we have seen them slash up to 45c/kg off the steers and up to 55c/kg on the heifers. This equates to a drop and a loss of between €150-200/hd in a short space of time. Steer base quotes have slipped another 5-10c/kg and are now down at 415c/kg with an odd 420c/kg being offered. There has been a 10-15c/kg hit on the heifer base quote as most plants offer 425c/kg. Some hardened sellers are getting 430c/kg with strong reports of up to 440c/kg secured for southern farmers who put a number together. While this seems a good price at the moment, it is still a long way from the 480c/kg a few weeks ago.

The young bulls haven't escaped unscathed either, especially the plainer types. O grades are now at 380-400c/kg with rumours suggesting that plants in the North are the best for the O grade Friesians. R grade quotes and prices run from 400-410c/kg, while the Us are at 410-420c/kg.

In response to growing anger among farmers, IFA representatives are meeting with factory management across the country this week to lay out their stall.

Henry Burns highlighted the damage the cuts were doing to confidence in the sector with ICBF data showing a 29pc increase in beef cows leaving the herd and a 7.4pc drop in calvings this spring.

The best of the cull cows are making between 350-370c/kg with 360c/kg being the norm for U grades. The Rs range from 330-350c/kg with up to 360c/kg negotiated. Prices for the Os vary from 320-330 in the main, while the P grades are generally selling for 300-320c/kg.

Bord Bia reported that the beef trade slipped over the past week in response to increased supplies and a slowdown in demand as hot weather conditions intensified.

Base prices quoted for R grade steers under the Quality Payment System were generally making around €4.25-4.30/kg, while quotes for heifers were generally making between €4.35-4.40/kg, with export meat plants paying an additional 12c/kg for in-spec quality assured stock. O-grade cull cows were making between €3.25-3.40/kg. Last week's estimated kill was 28,355 and cattle supplies are running 68,700 head higher compared to last year. The majority of the increase in availability to date this year is evident in the steer and cow category.

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As of mid July, Bord Bia reported the following R3 VAT inclusive prices: France – steers €4.58/kg, bulls €4.00/kg, heifers €4.87; Italy – bulls €4.05, heifers €4.30; Germany – steers €4.22, bulls €3.79, heifers €4.04; Spain – bulls €3.86, heifers €4.22; and Northern Ireland – steers €4.62, heifers €4.61.

Irish Independent