Farm Ireland

Tuesday 24 April 2018

Finisher injustice is unsustainable

Joe Healy

I know the banks have never been too far away from the news for the past while but the recent talk about our financial institutions appears to focus on Ulster Bank, with the Unite trade union accusing it of "naked profiteering".

This arises from the bank's decision to open its branches that are close to Halifax branches from 10am to 7pm, and this began yesterday. In a nutshell, the picture being painted by Unite is one of taking advantage of a bad situation and kicking a man when he's down.

This type of picture is very familiar to beef finishers and if they put one up on the wall every time the processors do this kind of thing, farmers would have an art gallery in their homes at this stage.

Loss-making prices, excessive penalties for the cattle below the R- and over 4+ and a few plants accidentally or otherwise forgetting to pay the quality assurance bonus on qualifying stock are typical of the treatment being dished out to Irish beef farmers by the processors and it is not sustainable.

The Single Farm Payment (SFP) is subsiding beef production on most farms and if farmers sat down and went through all their figures, I am pretty confident a lot of them would begin to think that they would be better off idle and not losing money than busy and losing it.

There are no real changes to quotes or prices. The big kills are making it easy for the factories to maintain downward pressure on quotes with last week's kill around the 34,000hd mark. While there is no guarantee, this trend should go in the other direction sooner rather than later, and I would expect that supplies would tighten quite a bit.

Donegal Meats is still top. The in-spec cattle are making 314c/kg for the Rs and 322c/kg for the Us. Young bulls in those grades are making 302c/kg and 311c/kg respectively. Thereafter, it is pretty safe to say that the general base quote everywhere else ranges from 291-294c/kg for the steers plus the 6c/kg bonus for quality-assured stock and 294-300c/kg plus the 6c/kg for the heifers. Factories included here are Slaney, Kildare, Eurofarm Duleek, Moyvalley, Liffey, Dunbia and the big three of AIBP, Dawn and Kepak.

The appetite for young bulls is disappointing in the South with farmers checking out the North and the export trade.

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ICSA beef chairman Michael Doran warned the factories that unless prices rise immediately, many finishers would be at risk of banks pulling the plug.

O-grade cows are generally making 230-241c/kg, while the Rs are making 241-252c/kg. There are many reports of farmers getting anything from 266-280c/kg for good heavy cows.

Bord Bia reported that the cattle trade showed little change last week, as steer prices eased a little, although the cow trade has picked up slightly. Trade has been helped by steady market demand despite on-going strong supplies at meat export plants.

Quotes for R-grade steers under the quality payment system (QPS) continue to make a base reference price of 291-294c/kg, while heifers are making in the region 297-302c/kg. These prices exclude the six cent on in-spec, quality-assured stock. The cow trade showed signs of improvement with O grades at 230-244c/kg.

Irish Independent