Farm Ireland

Tuesday 20 March 2018

Steer base quotes drop to just €4/kg

Joe Healy

Tipperary might have taken advantage of tired Waterford legs in Sunday's Munster final but beef factories are also taking advantage of the bad weather and higher costs on beef farms at the moment.

Last week's estimated kill of 23,400hd was the lowest weekly kill of the year to date, and it happened at a time when the euro/sterling exchange rate was in our favour. Despite this, the factories are attempting to cut beef prices further.

A few weeks ago, someone told me the factories would make a bold attempt to get base prices back to €4/kg. Although the man who said it is close enough to the industry, I don't think even he envisaged the movement being so brazen. If our kill was up at last year's level of 27,000hd, I dread to imagine where the quotes or prices would be.

Base quotes for steers are around the €4/kg mark in most of the country, with plants in the south attempting to go as low as 395c/kg. Some cattle killed early this week were sold at last week's price of up to 410c/kg and above.


Similarly with the heifers, lots killed yesterday and today were bought at 420-425c/kg but quotes for the rest of the week appear to be in the range of 405-415c/kg. The southern plants are at the lower end of the spectrum here too.

Bulls have probably taken the biggest hit, with good U-grades only being quoted 410c/kg and R-grades at 400-405c/kg. O-grade bulls are between 385-395c/kg.

Commenting on trade, IFA livestock chairman Henry Burns hit out at the concerted move by the factories to cut prices on the back of poor climatic conditions. He added that prices in the UK (our biggest market) were firm, at the equivalent of €4.50/kg.

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He urged Mr Coveney to get the live trade to North Africa and the Middle East moving quickly again.

Cull cow prices are not immune to the downward pressure either, with top prices of 360-370c/kg. R-grade cows are making 350-365c/kg, with O-grades at 340-360c/kg, depending on where you go. P+ cows are making 330-350c/kg in the main.

Meanwhile, Bord Bia reported that demand for manufacturing beef on our main export destinations was more difficult, while certain steak cuts, especially fillets, proved a little slower to sell.

Prices quoted for R-grade steers under the Quality Payment System were between €4.10/kg and €4.15/kg throughout the past week. Quotes for heifers were €4.20-4.25/kg. These prices exclude the 6c/kg on in-spec Quality Assured stock. Cow prices also eased in the past week, and O-grade animals sold for €3.45-3.60/kg. Cattle supplies to date this year are running 15.5pc or 125,000 head behind last year's levels.

In the UK, the beef trade is reportedly flat with market demand being described as subdued.

The latest Kantar figures show that beef purchases in the latest four-week period ending the June 10 fell by almost 6pc, which reflects the impact of higher prices being passed through to the consumer.

Reported cattle prices from the AHDB for GB R4L grade steers were averaging Stg 351.2 pence/kg dw (equivalent to 470c/kg incl VAT dw) for the week ended July 7.

On the Continent, trade across most of the key markets is still being affected by unusual weather patterns throughout Europe.

Some markets have reported promotions taking place in a bid to stimulate demand. In France, Irish steer hinds are making between €5.79-5.89/kg. R3 young bulls in Germany remain unchanged at €3.95/kg, with O3 cow prices making €3.53/kg. In Italy, R3 young bulls are making €4.13/kg, while O3 cows are making €3.15/kg.

Meanwhile, European cattle prices are running 12pc higher than last year at 381c/kg and Irish cattle prices are 3pc above the EU-15 weighted average price at 394c/kg.

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