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Scarce supplies force beef factories to slash penalties

BEEF factories slashed the penalty on poorer grading animals as they came under pressure to secure supplies in December, adding up to €50/hd to producer returns prior to Christmas.

The latest official figures show that the national average penalty from the base price (R=3=) applied by the processors to some R and O grade steers was reduced by 50pc during the third week in December compared to the corresponding week in November.

The prices paid for some R grade heifers benefited from reductions of up to 40pc in the penalty from base price during the same week as the factories were forced to compete for scarce supplies of cattle.

There was a 50pc increase in the bonus paid for some U grade cattle during the same week.

The newly released figures on the actual prices paid to producers for cattle slaughtered during the period December 19-23 were compiled by the Department of Agriculture on returns from the pay cheque's issued to farmers for the cattle.

The national average reduction in price from the base (R=3=) to R-5- steers was 11c/kg compared to 22c/kg for November, while there was a corresponding drop from 30c/kg to 15c/kg for O-4= grade steers. The average penalty was reduced for all grades.

The national average premium paid by the factories for U=4+ steers was 12c/kg compared to 8c/kg the previous month.

There was also a wide variation in the prices paid between individual factories. The base price factory average varied from 390c/kg to 415c/kg.

Most noticeable was the variation in the penalty applied to some O grade steers. Dawn Meats, Ballyhaunis applied an average penalty of 7c/kg from base to O=3+ steers compared to up to 26c/kg at other factories. This amounted to a difference of up to €60/hd for a similar grade and weight of animal.

The national average base price (R=3=) for heifers ranged from 403c/kg to 426c/kg.

There was a difference of up to 20c/kg or €60/hd in the penalty applied to O=3+ heifers. While ABP (Waterford) applied a penalty of 9c/kg, the discount from base prices at other factories averaged up to 29c/kg.

The Dawn Group factory, Charleville Foods paid the highest bonus for U=4- heifers at 27c/kg.

The supply of steers for the week was 4,396hd compared to 12,325hd for the same week in November and intake of heifers was 5,592hd compared to 8,119hd in November.

Indo Farming