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Farmers need to be wary of factories' tactics


"A big part of it is in training it is treated the same as matches in terms of our discipline" - Paul O'Connell

"A big part of it is in training it is treated the same as matches in terms of our discipline" - Paul O'Connell

"A big part of it is in training it is treated the same as matches in terms of our discipline" - Paul O'Connell

In keeping with our win over the French at the Aviva Stadium last Saturday, there are aspects of the beef trade which are not that pretty but the end result is positive.

Pressure akin to what Paul O Connell and his team-mates had to apply to defend their lead in the final quarter will have to be replicated by farmers and the organisations to prevent factories from attempting to pull quotes.

There is no basis for the downward pressure some of the processors are trying to exert on quotes. Markets are strong, sterling movement is very much in our favour and is currently up by as much as 8pc against the euro when compared with this time last year.

And even though the kill remains strong at an estimated figure of 31,900hd last week, there is little doubt, but that supplies will tighten going forward. There still remains more than enough of a gap between here and the British price to justify further increases to the beef price paid to Irish finishers.

Another positive signal is the fact that the cull cow trade continues to be very solid with top cows making from €3.70-3.85/kg and no mention from the factories of any negative movement to these animals.

Given all this, it is a bit rich but fairly typical of our processors to hint at a cut to the quotes for steers and heifers.

A few of them have dropped their offer by 5c/kg to €4.10/kg for the steers and €4.15/kg for the heifers.

In the main the quotes are at €4.10-4.15/kg and €4.20-4.25/kg for the bullocks and heifers respectively. Steers killed so far this week are generally bought at €4.20/kg while very few heifers have been sold at less than €4.25/kg.

Finishers need to battle this one out and it is imperative that the farm organisations and Minister Coveney don't allow the processors gain any momentum on this issue.

If the Forum is about transparency and accountability, any reasons for downward pressure to prices would need to be explained clearly by the processors and at the start.

Bull quotes remain firm with the better grades making up to €4.15-4.20/kg flat for mixes of R and U grades, while the Os are making from 395-405c/kg.

IFA livestock chairman Henry Burns said factories are paying a base price of €4.15-4.20/kg for steers and €4.25-4.30/kg base for heifers.

He said farmers knew that numbers were going to get a lot tighter and were not prepared to part with cattle at less than their full value.

The livestock man said the strength of sterling had driven on returns in our main export market in the UK, where EBLEX are reporting R4L prices of £3.72/kg, which is equivalent to €5.20/kg incl vat.

He said the increase in the value of sterling from 80p/€ to 75p/€ was worth an additional 28c/kg on returns from Britain.

As mentioned earlier, the R and U grade cull cows are commanding prices of between €3.70-3.85/kg. O grades are selling for €3.50-3.65/kg, with the Ps moving at €3.30-3.45/kg.

The cattle trade remained steady despite some increase in supplies according to Bord Bia. Trade was relatively quiet in our main export markets.

The majority of steers were purchased at a base price of between €4.15/kg and €4.20/kg on the Quality Payment System, while heifers were being purchased on average at a base of €4.25/kg with selected lots achieving higher prices.

These prices exclude bonuses payable on QA animals. Prices paid for O grade cull cows are generally making between €3.45/kg to €3.60/kg.

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The latest cattle supplies at export meat plants for the week ending February 14th standing at around 321,900 hd, up approximately 350hd on the corresponding week last year. Cumulative supplies for the year to date are in line with supplies for the corresponding period last year.

In Britain, trade was reported as being relatively quiet this week across most cuts, but an uplift in trade is expected in the coming weeks.

The latest Eblex beef outlook points to lower British beef production for 2015, with some small recovery forecast for next year.

The breeding cow herd in Britain has declined in recent years.

In June 2014 the dairy herd increased 3pc to reach 1.83m hd, while the suckler herd declined by 2pc to around 1.52m hd.

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