Farm Ireland
Independent.ie

Friday 14 December 2018

Farmers are 'broken' - Hopes for beef price bounce washed away by flood of cattle

Air of despondency among farmers as factories claim fridges are full and dry cow prices drop €180/hd

File photo
File photo

Martin Coughlan and Ciaran Moran

The chances of a pre-Christmas bounce in beef prices evaporated this week, with the factories continuing to face a flood of cattle.

Factory sources predict that the kill will breach the 40,000-head mark for the fourth week in a row by Friday, with little sign of an easing in supplies.

Bullock and heifer prices held at the low levels of the last few weeks, but the cow trade has taken a hit from the increased numbers, with quotes back 10c/kg.

Prices for in-spec prime cattle held at €3.75/kg for bullocks, with heifers 10c/kg above this at €3.85/kg.

However, quotes for R-grade cull cows have fallen to the €3.00/kg mark, with O grades on €2.80 and those grading P+3 at €2.60-2.80/kg.

This represents a fall in cow returns of €130-150/hd over the last six weeks. This downturn has also been reflected in the marts, where dry cow prices are back €140-180/hd.

Farmers report little appetite for cows from factory buyers. The word being put about is that fridges are full and the trade for manufacturing beef is slow. This was confirmed by Cormac Healy of Meat Industry Ireland (MII).

"The combination of strong beef output across Europe, coupled with higher EU beef imports, up 14pc this year, and a fall in EU beef exports has put pressure on market returns," Mr Healy said. "Stock levels being held by the industry are rising, reflecting the poorer demand out there.

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"Cow beef output in the EU is up 4pc, which is reflecting in the weaker manufacturing beef trade at present."

Farmers are 'broken'

The appetite for bulls isn't too great either, with quotes back 5c/kg yesterday. Quotes for U-grade bulls ranged from €3.80/kg to €3.90/kg, with R grades around the €3.70/kg mark, while O grades were coming in at €3.50-3.60/kg.

There is now little chance of the traditional pre-Christmas lift in cattle prices at this stage, given the high stock levels factories are holding and the continuing flood of cattle being killed each week.

Mart managers report an air of total despondency among farmers at the worsening situation in the beef trade.

One west of Ireland mart manager said that he had never before seen farmers as "broken" as they are at the moment.

Jim Bushe of New Ross Mart concurred. He said it was too late to talk of saving the suckler sector in the south-east because "it's already gone".

Meanwhile, the Brexit deal agreed between the UK and EU could create an Irish loophole around proposals in Britain to ban live exports.

Campaigners who want to see an end to live exports believe the UK's withdrawal agreement may make a ban impossible.

Environment secretary Michael Gove said that once Britain leaves the EU, the country could ban the export of thousands of live farm animals to mainland Europe.

The policy, which will likely be opposed by farming organisations, would enjoy support from campaign groups pushing for a broad ban.

But campaigners who have studied the draft Brexit agreement, published last week, say the document could undermine plans for a total ban.

The North's backstop protocol states: "Quantitative restrictions on exports and imports shall be prohibited between the [European] Union and Northern Ireland" - effectively insisting on free movement of goods.

'Factories in no doubt over farmer anger on prices'

The IFA demanded a "strong and immediate increase in beef prices" at a meeting yesterday with Meat Industry Ireland (MII) and the three main meat plant groups, ABP, Dawn and Kepak.

Pointing out that 2018 had been an extremely difficult year in terms of income losses at farm level, IFA president Joe Healy told the factories that they needed to restore confidence to the market in terms of increasing cattle prices for farmers.

"Beef farmers have been short-changed on price this autumn and it's high time the factories restored confidence to the beef sector and increased prices," Mr Healy said.

"IFA left the factories in no doubt of the anger among livestock farmers over prices and incomes this autumn."

The IFA leader said cattle prices in Britain were at £3.70/kg for R3 grade steers, which is the equivalent of €4.43/kg, making the price gap with Irish prices over €200 per head.

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