Farm Ireland

Friday 23 March 2018

Sellers travelling to avoid factory grid

All that was missing was that one of the favourites in Cheltenham last week wasn't called "Beef Finisher" or something similar.

In line with all the punters who emptied their wallets on Dunguib, Go Native, Kauto Star and 20 of the other 23 favourites, farmers continue to lose large amounts of money on their finished cattle and are being cleaned out by the beef factories.

Farmers in the main are doing their best to sell off the grid. Where there is no option but to sell on it, especially in the south, they are as confused by it as the Irish lineout were with their calls last Saturday evening.

I am still waiting for a positive comment towards it from "neutral" farmers. I'm aware of quite a few farmers willing to travel crazy distances in order to sell to a factory that will buy off the grid. Those farmers are very angry.

On a more positive note, there are at least three positive signs at the moment. Firstly, there does seem to be a bit of upward movement on prices despite most of the plants sticking to the old quotes. It was widely rumoured yesterday morning that a plant in the east paid up to 328c/kg including bonuses for a selection of top quality young U grade heifers. This plant was also actively scouting for plainer type P grade steers with distance not a problem. A flat price of 263c/kg had been offered to the farmer.

Another good sign was a drop to very close to the key 30,000hd kill figure, with last week's kill estimated at 30,130 animals.

Finally, there was a very clear improvement to the cull cow trade throughout the country. The quotes for the steers remain at 294c/kg in most places with the heifers at 300c/kg before the QA bonus of 6c/kg. Plants on those figures include Moyvalley, Liffey, Kildare, Slaney, Dunbia, Duleek and most of the AIBP, Dawn and Kepak plants.

I heard Dunbia paid 302c/kg of a base for bullocks while AIBP Cahir paid a base of 303c/kg plus the bonus for heifers. I think, at this stage, any farmer willing to bargain is negotiating a base of at least 300c/kg for his steers and anything from 303-308c/kg plus the 6c/kg for his heifers. There are prices of 314c/kg being offered for R and U grade bullocks and heifers to go to the north. In the north east a mix of under and over-age non quality assured R grades sold for a flat price of 298c/kg.

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The general run for cull cows ranges between 235-246c/kg with the R grades making anything from 248c/kg up to 280c/kg. One plant in particular paid as high as 294c/kg for top quality continental cows. It's great to see this but what does it say about an industry where old cull cows are making as much per kilo as the figure the plants are willing to quote as a base for prime R grade steers?

Bord Bia reported that there was little change in the overall cattle trade as supplies continue to exceed last year's numbers.

Quotes for R grade steers under the quality payment system continue to make a base reference price of between 294c/kg and 297c/kg, while heifer prices during the week stood at around 300-308c/kg. These prices exclude the 6c on in-spec quality assured stock. The cow trade is broadly unchanged with O grades making between 235-252c/kg.

The latest figures from the CSO illustrate the impact of the higher supplies to date on beef production. In February, production increased by 15pc to 46,200t. To date, total live exports are running some 65pc higher at 84,000hd.

Irish Independent