Farm Ireland

Thursday 19 April 2018

Stand up to processors

Joe Healy

Beef farmers are as desperate as Giovanni Trapattoni and the Irish soccer team for a change of fortunes this week. Whatever about tonight's match in Austria, it is imperative that the beef processors are stalled in their attempts to reduce steer base quotes below €4/kg.

Last week's story regarding the huge gap between prices on the grid for cattle from quality assured (QA) farms compared to those from non-QA farms concerned two large operators in particular. But this week the whole lot are singing off the same hymn sheet.

I spoke to one farmer yesterday morning who sold heifers on a base of 410c/kg. Three weeks ago he sold their comrades for a base of 435c/kg. Meanwhile, the steers he sold over the weekend at 400c/kg on the grid were 15c/kg back on their comrades also sold three weeks ago.

Those base figures are fairly typical of what is being achieved at the moment, with most of the steer quotes at 400c/kg, while some finishers are holding out for 405c/kg. Similarly, the base for heifers is more often than not 410c/kg. In the northwest there was mention of 444c/kg including all bonuses for in-spec heifers and 432c/kg for steers. Farmers must bear in mind that 'in-spec' in the northwest has seen the number of days on the farm rule move from 70 up to 90. If this is the case, some organisation needs to grab hold of these moving goal-posts that are resulting in different base prices for QA and non-QA stock, along with the different numbers of days required. This has resulted in large-scale confusion among farmers.

The best I heard for bulls ranged from a flat price of 412c/kg for a mix of R and U grades, to straight prices of 405c/kg for Rs and 418c/kg for Us. Generally, the plants are quoting 410c/kg for the U grades and 400c/kg for the Rs, with the O grades at 370-380c/kg. Farmers are at times negotiating a bit above the quotes, especially for the better grades. Farmers with prime stock to sell should enquire as to prices and extras for cattle going to the North for slaughter.

IFA livestock chairman, Henry Burns, said that there was no justification for the factory price cuts this week when our main markets were at the very least stable and possibly strengthened, with the British price for the R4 steer pushed close to €5/kg.

Cull cows have remained solid. Top cows are making from €360-390c/kg with R-grade cows commanding from 350-380c/kg. Prices for the Os range from 330-355c/kg while P grades are making from 300-325c/kg.

Bord Bia said the trade was relatively steady last week despite the ongoing increase in the number of cattle being marketed. It is being helped by tight supplies across Britain and other key European markets.

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Base quotes under the Quality Payment System continued to make between €4.10-4.15/kg for steers and €4.20-4.25/kg for heifers. The trade for cull cows also remained steady, with quotes for O grades generally making between €3.30 and €3.45/kg. For the year to date, cattle throughput is running almost 81,200 head above last year's levels.

In Britain, trade remained steady as demand and supplies were evenly matched. Best demand reported was for prime steak cuts. AHDB prices rose slightly, with the R4L steer price making the equivalent of €4.92/kg. including VAT.

On the continent, the seasonal shift towards forequarter cuts from hindquarter cuts continued. Hindquarter demand product remained quiet despite some promotions within the food service sector. In Italy, R3 young bulls made €4.19/kg, including VAT, while the O3 cow price hit 3.06/kg. The R3 young bull price was unchanged in France at €4.05/kg, with the O3 cow price falling by 2c/kg to €3.90/kg, including VAT.

Over the past few years, there has been strong growth in the number of calves born in Ireland, with registrations rising by almost 100,000 head (+5pc) in 2011, followed by a further increase of 115,000 head (+5.5pc) last year. However, recent analysis of the Department of Agriculture's Animal Identification and Movement (AIM) database reveals a fall in registrations so far this year compared to 2012.

For the first six months of this year, a decline of 47,000 head (-2.6pc) was observed in total calf registrations. It is very interesting to note that the number of calves born which were bred from dairy sires actually increased by 36,000 head (+5.5pc). During the same period, the number of calves sired by a beef breed recorded a drop of 83,000 head (-7.3pc). This reflects reduced calvings by suckler cows, along with fewer dairy cows being crossed with beef bulls.

Irish Independent