Farm Ireland

Saturday 25 November 2017

Overdue rise in base price might come yet

Joe Healy

Some things just do not seem to change, whether it is the Irish beating the English for the sixth time out of seven or our processors unwilling to move on the base price for cattle.

In any case, I am beginning to think that we would need a Stephen Ferris-like force to move the factories at this stage. Now, having said that, I did get the feeling from a few of the factory sources I spoke to yesterday that there may be some positive movement in the pipeline.

The kill staying up over the 30,000 mark is definitely not helping and last week's estimated figure was over 33,000 head. At current prices, however, farmers continue to lose a fortune. Selling good R-grade steers at a base of 291c/kg to 294c/kg (104 -105p/lb) is just not sustainable at present cost of production and continues to leave us trailing our UK counterparts by 40c/kg or €150 on a 375kg carcass.

Moyvalley, Liffey, Dunbia and most of the AIBP, Dawn and Kepak plants are quoting a base of 294c/kg for the bullocks, with the base for the heifers ranging from 294c/kg up to 300c/kg.

A few plants, especially in the south, are only quoting 291c/kg for the steers. So farmers, if you are selling, shop around and make a price before you sell.

Moyvalley, Dunbia and Kepak Athleague were mentioned at the 300c/kg for the heifers. The 6c/kg quality assurance bonus is paid on top of all those figures mentioned but again, I will remind farmers to ensure they receive this as I continue to get reports of farmers not getting the 6c/kg even if their stock qualify.

When they enquire about it they are told that it is some kind of mistake and that the money will be sent on to them.

What about the farmers who do not notice or enquire about it? Best price I heard of for heifers was from a plant in the east which paid 308c/kg for over-age R and U grades and 314c/kg including the QA bonus for the ones that were underage.

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Liffey and Slaney are on the same base of 294c/kg for both the heifers and the steers. The southeast plant, however, continues to pay the €11 bonus on top of the 6c/kg QA bonus for qualifying stock killing out between 290kgs and 420kg up to but not including 4H.

Dunbia paid farmers in the Angus group 305c/kg for cattle between 30 and 36 months and 308c/kg plus the 6c/kg QA bonus for cattle less than 30 months.

Young bulls are not in any great demand. Donegal is paying 298c/kg for the Rs and 305c/kg for the Us.

ICSA national beef chairman Peter Fox has expressed major dissatisfaction that factory processors are manipulating cattle prices for their own "greedy benefit".

"On the one hand, factories are offering larger beef finishers forward prices of €3.22/kg (£1.15/lb) for R grades and €3.28/kg to €3.33/kg (£1.17/lb -- £1.19/lb) for U-grade cattle," he said. "To balance the books, they are offering finishers with smaller lots the base price of €2.94/kg (£1.05/lb)."

There is no real change to the cull cow trade, with the general run making from 230-246c/kg. Good cows are making anything from 252-266c/kg.

There was little change to report in the cattle trade last week according to Bord Bia, despite supplies of finished cattle remaining well ahead of last year. Cattle prices across the board were running at similar levels to the previous week. This reflects the relatively stable demand evident across most markets.

Quotes for R-grade steers under the quality payment system continue to make a base reference price of between 294-297c/kg, while heifers are in the region 297-302c/kg. These prices exclude the 6c/kg on in-spec quality assured stock. The cow trade also remains unchanged, with O grades making between 230-246c/kg.

In the UK, a steady trade was reported for the week with demand reported as reasonable for all cuts. Reported cattle prices from the AHDB for the week ending February 20 showed further slight easing with GB R4L-grade steers averaging Stg281.8p/kg dw (equivalent to 332c/kg including VAT dw).

On the continent, a solid manufacturing trade and little change in forequarter cuts is helping price levels. Across several markets, a recent increase in promotional activity has helped to boost sales.

Lower supplies of cattle have also been reported in some markets. In Germany, R3 young bull prices rose by 1/c to €3.39/kg, while O3 cow prices rose by 2/c to €2.35/kg while in Italy they are making €3.96/kg, while O3 cow prices are making 2.22/kg.

Irish Independent