Farm Ireland

Saturday 24 March 2018

Processors anxious over tightness of cattle supply

Rumour factory goes into overdrive despite strong steer kill so far

Declan Kidney's actions would suggest that he is definitely after a contract and there are also a few reports and rumours of contracts in the air with some factories. It reflects the anxiety among processors regarding the tightness of supplies until June. The kill has been quite strong so far this year and last week's estimated 29,568hd adds another 4,000 to the extra 22,000hd that have already been killed in 2013 compared to last year. Having said that, some of the approaches have been pretty weak and watery, with the factories not committing themselves too much or hanging themselves out to dry.

Finishers I spoke to who were approached found it impossible to get any concrete figures other than a bonus over what was the base at the time of sale. Needless to say, none of them were making decisions yet.

Meanwhile, for the rest of us, the in-spec quality assured stock continue to be keenly sought after. I have heard of 445-450c/kg on the grid negotiated for heifers with the quotes generally running between 435-440c/kg. The steer quotes range in the main from 420-425c/kg. Prices of up to 430c/kg have been secured in the South while 425c/kg is being got around the country. The in-spec R grade killing out under 400kg is making 435c/kg in the northwest, but a cut of 10c/kg applies if cattle exceed this weight and a further 10c/kg cut if not QA.

Wherever you are selling, be very clear on what your price is for, if there are any weight restrictions, and whether the price is the grid base or includes the QA bonus.

It is amazing the amount of farmers that tell me that they are getting such-and-such a figure for cattle. But when they are asked if the QA bonus is included or not, they really have no idea.

U grade bulls are making between 420-425c/kg with the Rs at 410-415c/kg. Flat deals of 420c/kg for a mix of R and Us are being done. The O grades are generally at the even money of 400c/kg while 390c/kg is mentioned for the Ps.

The IFA's Henry Burns said that beef prices continue to rise with steer base prices making up to 430c/kg and the heifers a base of 440-445c/kg. He added that bull prices were also rising on the back of the improvements to the steers and heifers.

The double muscled E grade cows, while extremely scarce, are commanding prices of 420c/kg. The Us are making from 380-405c/kg. R grades range from €360-390c/kg. Prices for the O grades are generally at 350-360c/kg while the P cows vary from 330-350c/kg.

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Bord Bia reported that the cattle trade improved over the past week despite the on-going trend of strong cattle supplies continuing.

Trade continued to be helped by strong demand across most of the key export markets for in-spec cattle.

Prices quoted for R grade steers under the Quality Payment System were around €4.15-4.20/kg, while quotes for heifers were generally between €4.30-4.35/kg.

These prices exclude the 6c/kg on in-spec quality assured stock. O-grade cull cows were making €3.45-3.55/kg.

In Britain, trade was reported as generally flat with supplies, although tight, adequate to meet demand. Steaks and round cuts are described as reasonably firm while the trade for forequarter continues to be steady.

Reported cattle prices from the AHDB increased slightly during the week, with GB R4L grade steers averaging at 375.9pence/kg dw (453c/kg dw).

On the Continent, trade continued to be helped by ongoing tight supplies across the different key export markets.

In Italy, R3 young bulls were making €4.30/kg VAT inclusive, while O3 cow prices stand at €3.10/kg. Irish steer hinds are making €5.55-5.65/kg in France, while O3 cow prices are making €3.63/kg.

Elsewhere, after Russia's WTO accession in August 2012, tariffs fell in accordance with accession agreements, though WTO tariff changes will not be fully implemented until 2014-2015. Accession, did however, motivate increased importation to Russia in the months following Russia's WTO entrance.

Irish Independent