Farm Ireland

Sunday 18 March 2018

Processors pressuring finishers to accept less

Joe Healy

The love-in between our Government and IMF leadership candidate Christine Lagarde over the past week is not being replicated between our beef finishers and the processors, as the latter continue to exert downward pressure on prices.

Despite strong resistance on the part of the farmer, little cracks are appearing, with more of them probably accepting a base quote of 3-6c/kg less than they would have got a week ago, even though finishers with substantial numbers are still negotiating good deals.

Despite last week's estimated kill staying strong at 29,750hd, the factories remain quite keen to close any deals they get involved in. The plants in the main now appear to be quoting a base of 360-365c/kg for the steers, with 365-370c/kg being the norm for the heifers.

In-spec steers going into Donegal meats are meeting an 11c/kg drop from their comrades that were slaughtered yesterday week, with the U grades now making 381c/kg, the Rs at 372c/kg and the O+ and Os at 364c/kg and 356c/kg respectively. Heifers in each grade are on 3c/kg more. R-grade young bull prices are at 366c/kg, while 375c/kg is being secured for the Us. O+ and R-grade cows have held reasonably solid at 314 and 330c/kg respectively.

Further south, the big three, as well as most of the independent plants, are quoting a base of 360-365c/kg for the steers. Plants mentioned here include Kildare, Slaney, Dunbia, Liffey and Duleek. Moyvalley is only offering an extra 6c/kg for the Us, while Liffey has an 11c/kg difference between the Rs and Us.

Moyvalley is quoting 358c/kg for the O grades. Its young bull prices are similar to the steer figures but the plant has a +11c/kg in each grade for the heifers over the bullock quotes.

As already mentioned, the heifer base is in the 365-370c/kg bracket around the country.

Commenting on the trade, IFAs Michael Doran said that the factories were having to pay 6-10c/kg over the quoted prices to get stock, as the numbers of prime cattle coming out remain tight due to a large percentage of the weekly kills being cull cows.

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He anticipated that this tightness would continue into the near future before any reasonable supplies of grass cattle began appearing for slaughter.

The R-grade young bulls are making 364-368c/kg, Us 370-378c/kg, and O grades at 350-356c/kg. Some farmers sold mainly R-grade cattle flat yesterday at 386c/kg and a mixture of R and U-grade young bulls for a flat price of 381c/kg.

Quotes for the top of the cull cows range from 322-336c/kg, with some farmers securing prices of 336-350c/kg. Quotes for the O+ and R grades can be anything from 308c/kg up to 330c/kg. The O grades are generally in the 302-314c/kg range with the P+ cows at 300-311c/kg.

According to Bord Bia, the trade in Britain has been generally steady over the past week. Steak cuts remain firm with prices stable. Although, reportedly there are some signs pointing to a slowdown in demand for round cuts.

Reported cattle prices from the AHDB have firmed, with GB R4L grade steers averaging Stg308.5p/kg deadweight (equivalent to 374c/kg including VAT deadweight) for the week ended May 21.

On the Continent, there was little change to report in the trade. Ongoing tight supplies are helping trade for most cuts, while the fifth-quarter market is also performing well. In France, Irish steer hinds remain unchanged at €5.47/kg, with German cow hinds also unchanged at €4.63/kg.

R3 young bulls in Germany are averaging €3.50/kg, while O3 cows prices rose by 7c/kg to €3.05/kg.

In Italy, the R3 young bulls are at €3.72, with O3 cow prices making €2.80/kg all-inclusive of VAT.

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