Farm Ireland

Thursday 22 March 2018

Finishers feel the pinch as factories play tough

Joe Healy

Never mind the Anglo tapes. Beef farmers would really love to hear the talk between factory men over the past week as they continue their efforts to exert downward pressure on beef prices.

In a blow akin to Paul O'Connell's broken arm, the bulls and especially the poorer quality types have taken a hit of 5-15c/kg over the past week. Supplies are playing into the factories' hands also with last week's kill of 27,784hd nearly 4,000 above the corresponding week in 2012.

Finishers are angry and disappointed with the processors, especially considering the huge costs of finishing cattle this year. In Anglo-speak, farmers have a lot of 'skin' in the game. One of the finishers I was talking to said that the grain merchants would want to ensure that the projected drop in grain prices is reflected in ration and meal costs as this cost has been enormous on beef farms throughout the past year.

Some plants are quoting as low as 410c/kg for the O-grade bulls but up to 415c/kg has been paid for O-grade Friesians with Friesians grading R making 435c/kg. A mixture of P and O bulls under 18 months made 430c/kg flat. In general, the quotes and prices for the Rs vary from 430-440c/kg with the Us at 450-460c/kg

Quotes and prices for steers are generally in the range of 445-450c/kg with the higher figure proving harder to secure as each day passes. On the heifer front, I heard of prices from 465-475/kg being negotiated. IFA livestock chairman Henry Burns said that with British cattle prices at the equivalent of €5/kg and demand and cattle thrive very strong, farmers are in a good position to bargain hard with the factories. He added that some finishers are getting base prices of up to 455c/kg for their steers and 480c/kg for the heifers, with specialist stock making up to €5/kg flat.

Cull cows have also been hit by 10-15c/kg with the very best of them struggling to break the €4/kg. Most of the Rs are being bought for 370-390c/kg while the O grades are making from 350-370c/kg. Cows grading P are selling for 340-350c/kg.

Base prices quoted for R-grade steers under the Quality Payment System were €4.50-4.55/kg, while quotes for heifers were €4.75-4.80/kg, with export meat plants paying an additional 12c/kg for in-spec QA stock. O-grade cull cows were making between €3.70-3.80/kg.

In Britain, trade remained unchanged as favourable weather conditions continued to help. Reported cattle prices from the AHDB firmed during the past week, with GB R4L grade steers averaging Stg 406.5 pence/kg dw (equivalent to 498c/kg incl VAT dw) for the week ended June 15.

Also Read

Overall, trade continues to be helped by ongoing tight supplies across the different key export markets. Strong demand is evident for hindquarter product, with best trade for fillets and striploins. Trade for forequarter product remains steady.

In Italy, the R3 young bull price remained unchanged at €4.09/kg, while the O3 cow price also remains unchanged at €3.29/kg inclusive of VAT. The R3 young bull price eased by 3c to €4.00 in France, with the O3 cow price making €3.83/kg VAT included.

According to Bord Bia, up until June 15 Irish R3 steers averaged around €4.17/kg, an increase of over 6pc on the previous year's levels. This follows three consecutive years of growth in prices. Demand for Irish quality-assured beef has strengthened in Britain in particular as some of the main retail outlets are sourcing from just Britain and Ireland to reduce supply chain issues.

The Irish R3 steer price has been 13pc above the EU average since the middle of January.

Irish Independent