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Saturday 20 January 2018

Quotes fall 5c/kg as factories play hardball, despite low kill

Joe Healy

If only we could disallow the factories' attempts to pull quotes like the referee disallowed Cyril Donnellon's goal on Sunday. The outcome could be as positive for farmers as it was for Brian Cody's Kilkenny team.

Even though the weekly kill is still running 5,000hd below last year, the factories are continuing to put major pressure on beef quotes. I dread to think what the factories would be at if the kill was up around 35,000hd.

Steer quotes are at a base of around 380-385c/kg. In-spec R-grade steers are making up to 402c/kg in the northwest, while R-grade heifers are making 408c/kg. Elsewhere, base quotes for heifers are 390-400c/kg.

These figures are around 5c/kg down on last week's quotes but it's the processor's plans for the immediate future that are most worrying. Farmers are at a critical juncture, with rising production costs and additional feeding needed. Further cuts to prices will result in large losses.

The best I heard for young bulls was 402c/kg for the U grades going into Donegal meats, while reports suggested a flat price of €4/kg was secured for a mix of R and U grades.

Quotes for U grades are 385-390c/kg, with R grades at 380-385c/kg. O grades are at 365-370c/kg.

On the cow front, the 370c/kg that was paid early last week by some plants is much harder to come by this week and is only available for top U-grade cows. U grades are making 350-370c/kg, while R grades are making 340-352c/kg. O+ cows are commanding up to 346c/kg in the northwest, while Os are making 310-340c/kg and P+ cows are at 300-334c/kg.

IFA livestock chairman Henry Burns accused the factories of ripping confidence out of the beef sector. He maintained that markets in the UK and across Europe were very strong and there was no basis whatsoever for the price cuts. Mr Burns added that supplies are tight and should remain so for the next few weeks.

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Meanwhile, Bord Bia said that the cattle trade last week remained broadly similar to the previous week's levels. Market demand across a number of our key export markets remains steady. This, combined with ongoing tight cattle supplies, has helped maintain the trade, especially for in-spec cattle.

Prices quoted for R-grade steers under the Quality Payment System were €3.85-3.90/kg, while quotes for heifers were €3.95-4.00/kg. These prices exclude the 6c/kg on in-spec Quality Assured stock. O-grade cull cows made €3.30-3.40/kg.

Cattle supplies at export meat plants for the week ending September 28 stood at 30,640 head, which was around 5,200 head lower than the corresponding week in 2011. Cattle supplies to-date this year are running around 14pc or 159,000 head behind last year's levels.

SUpplies

In the UK, trade was reportedly similar to previous weeks, with tight supplies continuing to match current demand levels. There are reports of increased availability of roundcuts from the continent at wholesale level.

Reported cattle prices from the AHDB have firmed, with GB R4L grade steers averaging Stg355.2 pence/kg dw (equivalent to 468c/kg including VAT deadweight) for the week ended September 22.

On the Continent, trade across some of the key markets was largely firm, with prices reflecting this. Demand continues to shift from hindquarter to forequarter cuts in response to cooler weather conditions throughout Europe. While on some markets, demand is reportedly building for fifth-quarter cuts.

In France, Irish steer hinds are making up to €5.71kg inclusive of VAT. R3 young bulls increased by 4/c to €4.20kg in Germany, with O3 cow prices decreasing by 2/c to €3.48/kg.

In Italy, R3 young bulls remain unchanged at €4.38/kg, while O3 cow prices eased to €3.24kg including VAT.

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