Farm Ireland
Independent.ie

Tuesday 24 April 2018

High supplies are no excuse for the downward trend in prices

Joe Healy

The Dubs are back, Angela Merkel is back and – I hate saying this at the start of the festival that is Ploughing week – beef prices are back. Whenever the weekly kill goes above the 30,000 mark, the factories hold the aces and last week's estimated kill from the Department of Agriculture stood at 33,900hd, some 3,700 or 11pc ahead of the corresponding week last year.

This, however, does not excuse the actions of the factories at a time when the trade in our largest market across the water in Britain is almost €1/kg or 20-25pc ahead of where we are at. This translates to Irish finishers receiving €300-350 less for his/her steer compared with their British counterparts. The processors need to think about the consequences that will have on the Irish beef industry and the 2020 targets.

On the positive side, improved weather conditions over the weekend should result in another grass growth spurt and cattle supplies should also tighten this week as farmers flock to Co Laois. This scarcity had already begun to manifest itself yesterday morning as several agents remarked on the scarcity of farmers enquiring about selling.

Prices in the North remain stronger than down south, with 410c/kg available for steers and 400c/kg for young bulls, in addition to free transport.

Having said that, I know that some bulls killed in the midlands last Friday achieved 410c/kg for the U grades and 400c/kg for the Rs.

Quotes are generally at 390-395c/kg for the Us while the R grade quotes are 10c/kg lower at 380-385c/kg. The Os remain at 370-380c/kg. Steer quotes are mainly at 390c/kg, with some farmers bargaining for up to 395c/kg before agreeing to sell. Heifer quotes have now slipped under 400c/kg, with a number of plants offering as little as 395c/kg. However, those same plants, when pushed, are willing to pay 400c/kg base and even 405c/kg in some cases.

Remember, if you are selling non-quality assured stock make sure you know what the factory is going to pay you before you kill.

IFA livestock chairman Henry Burns said the factories are finding it impossible to buy cattle at the lower quoted prices and are having to pay a base of €4.00/kg for steers and a base of €4.10/kg for heifers and bulls. He said with the Ploughing match this week and the good weather, farmers have made up their minds they are not parting with cattle at less than a base of €4.00 for bullocks.

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Henry Burns said it was clear some processors who were leading the downward charge on prices were profiteering on the back of the British/Irish price difference.

"Factories have now opened up an unprecedented €1/kg price gap with the UK cattle price and this is not sustainable. Irish farmers cannot be placed at a €370/animal disadvantage to their British counterparts," he insisted.

CRISIS

The IFA man said figures indicated that the suckler cow herd had already fallen by 100,000 and this, combined with losses from the spring fodder crisis and empty cows, meant up to 200,000 animals could be lost from the herd.

Department of Agriculture figures for the first six months of 2013 showed that the number of calves sired by a beef breed fell by 83,000hd or 7.3pc. Mr Burns warned that a drop in suckler production of that magnitude had enormous implications for farmers, exports, jobs and the rural economy.

The cull cow trade remains steady with quotes and prices in the range 300-375c/kg depending on grade. The best quote on offer yesterday was 375c/kg for good heavy Rs in the midlands. Quotes and prices for R grades are in the range 330-375c/kg and the U grades are at 360-375c/kg. O grade dairy cows are at 320-330c/kg, while P grades are at 300-320c/kg.

Meanwhile, Bord Bia reported a slight easing of the cattle trade last week as a result of the seasonal increase in cattle supplies. Better weather conditions had some impact on consumer demand, with trade for roundcuts and forequarter product seasonally weaker than usual.

Base quotes under the Quality Payment System were €3.90-3.95/kg for steers and €4.00-4.05/kg for heifers. The trade for cull cows remained steady, with quotes for O grades at €3.20-3.35/kg. For the year to-date, cattle throughput is running almost 86,400hd above last year's levels.

Steers and cows continue to account for most of the increase in supplies.

In Britain, trade was reported as brisk with all parts of the carcase being in good demand. Demand remained steady for steak cuts and forequarter product. While trade for round cuts remains steady, there were signs that demand will strengthen as the seasonal changeover to roasting cuts gather momentum. Reported prices from the AHDB increased slightly, with the GB R4L steer price now making 402.4p/kg (equivalent to €4.99/kg including VAT) for the week ending September 14.

On the Continent, the seasonal shift towards forequarter cuts from hindquarter cuts continued. Some promotional activity across the forequarter category continues to help offset the seasonal decline in hindquarter sales across some of the key export markets.

Best trade reported is for knuckles. In Italy, the R3 young bull price was €4.07/kg inclusive of VAT, while the O3 cow price was €3.01/kg.

The R3 young bull price in France fell by 4c/kg t €3.97/kg, while the O3 cow price was €3.67/kg including VAT.

Irish Independent



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