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price increase but huge gap remains

While Leinster almost slogged their way to what would have been a priceless draw in France on Sunday, it is also a slog for the beef trade with the processors similar to the French defence, stubbornly refusing to yield much ground.

Despite some slight increases, there is still a huge gap between the general base quote of an average 400c/kg here and the vat inclusive price of 476c/kg being paid by the same processors for similar grade cattle in Britain. I suppose if they can get stock here at that discount, why would they pay any more? The statistics show that the plants are getting plenty of stock with last week's kill of almost 33,300hd a contender for the biggest weekly kill of 2012.

It is also probably the first time this year that the kill has been higher than the corresponding week last year. The bright spot here is that while the kill was very high by this year's standards, the agents and factories were still very anxious to source and secure stock with some farmers successfully bargaining for as much as 5-10c/kg above the first offer.

Price aside, I have met quite a few farmers recently who have not been happy with the kill-out weight of their cattle. I always say that you should try to weigh your cattle before they leave the farm and to ensure that the factory knows that they are weighed. Farmers that have begun to do this often remark that they feel it makes a significant difference.

Steer quotes are generally in the 395-405c/kg range. Farmers are holding out for a minimum of 400c/kg before agreeing to sell with quite a few securing bases of 405c/kg. Reports suggest that in-spec R-grade bullocks were making up to 414c/kg in the northwest. The in-spec heifers were at 420c/kg in the same plant. Elsewhere, the base for the heifers was varied between 410-420c/kg but as high as 425c/kg was said to be achieved in the northeast.

The best I heard paid for a mix of good young bulls was 420c/kg but similar to the 415c/kg I reported on last week it was a case of a bit of one-upmanship between two plants on the Western seaboard. We could do with a bit more of that.

Otherwise, the U grades are generally being quoted for at 410-415c/kg with the Rs at 400-410c/kg. O-grade bulls range between 385-395c/kg.

Demand for the cull cows remains strong. Heavy U-grade Continental cows made up to 380c/kg in the east with 370c/kg mentioned for the northeast and the northwest. Some plants are quoting 360c/kg. Quotes and prices for the Rs vary from 350-370c/kg while the Os range from 325-350c/kg.

The P+ cows are making between 305-334c/kg. The IFA's Henry Burns said that very strong demand across the country has led to most factories having to pay up to 405c/kg base for steers and a tops of 420-425c/kg base for the heifers. Bulls are making up to 415c/kg for mixes of quality R and U grades while 380-390c/kg has been negotiated for top cows.

Bord Bia described the beef trade as firm last week, reflecting the seasonal demand evident in the run up to Christmas. Supplies both in Ireland and key export markets remained relatively tight. The best trade continues for in-spec prime cattle supplies.

Prices quoted for R-grade steers under the Quality Payment System were making between €3.95-4.05/kg, while quotes for heifers were generally making from €4.05-4.15/kg. These prices exclude the 6c/kg on in-spec Quality Assured stock. O-grade cull cows were making between €3.30-3.40/kg.

Year-to-date supplies remain 13pc lower, led by tighter steer and heifer disposals.

In Britain, a good trade was reported during the past week as demand remained firm overall. Fillets and rumps continued to be in good demand although round cuts were slower than expected. Reported cattle prices from the AHDB eased slightly during the past week with GB R4L grade steers averaging an equivalent of 476c/kg including VAT.

In France, Irish steer hinds were making around €5.89/kg including VAT. R3 young bulls eased to €4.25/kg, with O3 cow prices unchanged at €3.27/kg. In Italy, R3 young bulls were steady at €4.13/kg, while O3 cow prices eased slightly to €3.13/kg.

Elsewhere, the drop in Finnish milk production over the past decade has resulted in a 30pc increase in the volume of beef imports there. Irish beef exports to Finland are small, at 762t in 2011. The largest beef supplier was Sweden with approximately 4,200t followed by Poland and Germany.

The key challenge for Irish companies to enter this market appears to be the logistics transport cost with rates of €5,000-6,000 per load.

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