Farm Ireland

Saturday 20 January 2018

Further price rises big boost for sector


Joe Healy

If Ronan O Gara can repeat a strong showing on consecutive weeks then there is no reason why the beef trade can't do the same thing -- and this is exactly what it is doing.

While the many last-minute heroics of the Munster man has already acquired legendry status, the continuing positive movement in the beef trade is a relatively recent enough phenomenon, but very welcome and warranted nonetheless.

Quotes and prices have risen again and, to put it bluntly, if you are selling your steers below a base of 400c/kg and your heifers below a base of 410c/kg you are not maximising your stock's value.

Of course, you will be quoted less and if you mention this column you might even be told by your agent or factory man to try selling them to me (and you wouldn't be the first to get this piece of advice). But if pushed they are willing to pay -- and are paying -- well in excess of their quotes and definitely not anxious to leave stock behind.

A sign of how nervy the factories are for stock can be taken from the opening this week by Liffey Meats of the former O'Connor factory outside Ballinasloe. This follows on from Dunbia doing something similar in Ennis a few months ago.

U-grade in-spec heifers are making 424c/kg going into Donegal Meats, with the Rs at 412c/kg. O+ and O= grade heifers are making 404c/kg and 395c/kg respectively. The steers are running 6c/kg behind the heifers for each grade. Elsewhere, while base quotes might be as low as 395c/kg for the heifers, little or no heifers are being bought below the 400c/kg, with seasoned sellers reporting that 410c/kg is widespread as prices of up to 415c/kg are being talked about from a few plants. Similarly with the bullocks, where base quotes can be as low as 385c/kg, this is only masking the reality of 395-400c/kg being the norm.

A top of 410c/kg flat for a mix of R and U-grade young bulls has been paid. Quotes and prices reported for the Us range from 395c/kg to 412c/kg. The R grades vary from 386c/kg to 410c/kg, with the Os at 375-385c/kg. O+ bulls are making up to 392c/kg.

IFA livestock chairman Michael Doran said that tightening of supplies and strong markets were helping to drive on the trade, with processors having to pay €4/kg for bullocks and €4.10-4.15/kg base for heifers.

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Top quality, heavy U-grade cows are making up to 364c/kg but they are generally selling for 350-361c/kg. Rs are at 324-356c/kg, with the O grades making 319-342c/kg. P+ cow prices are at 308-331c/kg.

According to Bord Bia, cattle supplies are running more than 4pc lower than the same period last year. Last week's estimated kill was 34,000hd, which was around 4,850 animals down on the same week last year.

In Britain, the trade continued to firm in the run up to Christmas, helped by good demand combined with tight supplies. The best of the trade is for roasting joints. Overall demand for forequarter product remains firm.

Reported cattle prices from the AHDB have firmed, with GB R4L grade steers averaging at Stg342.6p/kg deadweight (equivalent to 422c/kg including VAT deadweight) for the week ended November 12.

On the Continent, apart from the Italian market, trade again picked up across most of the key markets, with prices reflecting this pattern.

In Germany, R3 young bull prices increased by 8/c to €4.07/kg, while O3 cows rose by 3/c to €3.12/kg.

R3 young bulls in Italy fell by 7/c to €4.14/kg, while O3 cow prices dropped 1/c to €2.87/kg.

In France, Irish steer hinds were making €5.16-5.26/kg, while German cow hinds were at €4.52-4.63/kg including VAT.

While awareness of Irish beef is relatively low at 10pc in Germany, it is planned to increase to 50pc after three years following the current promotional campaign. Exports of Irish beef to Germany are estimated to reach 15,000t this year, which compares to 6,000t in 2009.

Elsewhere, the global beef market is currently characterised by tight supplies combined with robust demand across Southern Asia, the Middle East and Africa.

Indo Farming