Farm Ireland

Friday 23 March 2018

Plants come under supply pressure as numbers tighten

Joe Healy

I hope you backed one or more of the Irish winners at Cheltenham because Colonel Gadaffi's stubbornness in Libya pales into insignificance when compared to the Irish beef processors' reluctance to increase beef prices.

If some positive movement doesn't occur soon, beef finishers will be hoping that President Barack Obama brings a four-leaf clover back to them in May in return for his bowl of shamrock.

I spoke to one beef finisher at the weekend who, I'd say, was nearly falling for the factory propaganda about beef prices not being able to increase as households would not be willing to pay accordingly at the other end.

Yesterday morning I was talking to another farmer who, in the past fortnight, had done his own exercise on a 300kg carcass R3 heifer -- estimating a €3.50/kg price, it left her at €1,050. Slaughtered, boned out, trimmed and cut up, and working conservatively on the figures, this heifer's retail value was a minimum of €2,100 -- double what the farmer would have received for her after two years of looking after her. So, the room and the need is there for our processors to start treating our finishers with a tiny bit of respect and fairness.

It is extremely disappointing to see plants continue to quote as low as 330c/kg base for steers. Yes, more is being paid to those who bargain but there are lots of growers out there who take what they are offered and, as such, are doing both themselves and the industry a disservice, and helping the processors to keep the prices at ridiculously low levels.

The good news is that there definitely seems to be a tightening of supplies, especially over the weekend and yesterday. This may help the situation.

Last week's estimated kill was 29,130. Agents are admitting that numbers are proving more difficult to come on this week, with prices of 6c/kg above the quote frequently required to secure stock. The base quote for steers was 330-336c/kg, with the quality assured bonus of 6c/kg on top of this.

Heifer base quotes are in the 336-342c/kg bracket. Kepak Athleague is at the higher end and has quoted up to 348c/kg for quality, suitable, underage heifers. Donegal is paying 348c/kg and 356c/kg for the in-spec R and U-grade steers, with an extra 3c/kg for the heifers in both grades.

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U-grade young bull quotes are at 342-348c/kg but anyone with those types is holding out for a minimum of 350c/kg. Rs are at 336-342c/kg, while the O grades are on 319-322c/kg.

The IFA's Michael Doran said that unless there is an immediate and significant price rise, margins are going to be wiped out for finishers.

The cull cow appears to be meeting with the liveliest trade as factories have improved quotes for well-fleshed stock. Cows going to Donegal are commanding prices of up to 311c/kg, with the O+ grades over 320kg at 305c/kg.

Elsewhere, while Liffey Meats may only be quoting a general run of 280-291c/kg up to a top price of 302c/kg, it has actually offered as much as 291c/kg for the Os and 308c/kg for the Rs. Thereafter, the quotes seem to be 280-291c/kg.

The trade in Britain has improved in response to tighter supplies, according to Bord Bia. Best trade reported was for steak cuts and forequarter cuts. Reported cattle prices from the AHDB increased slightly as GB R4L grade steers averaged Stg 287.1p/kg deadweight (equivalent to 347c/kg) for the week ending March 12.

On the continent, demand for steak cuts is reportedly stronger than usual, while trade for forequarter product remains firm.

Indo Farming