Farm Ireland

Wednesday 13 December 2017

U grades in demand at quotes of 450-470c/kg

Joe Healy

The beef trade is not landing any knock-out punches à la our European gold and silver medal boxers, but it is performing pretty solidly.

Some very acceptable prices have been paid in the past week, although there does seem to be an attempt to pull cow prices. Two particular plants were willing to pay 415-420c/kg for good R grade cows, while a couple of others refused to pass the €4/kg mark.

The estimated kill for last week was 25,800hd and, while this is up on the corresponding week last year, it is not a huge kill and a number of plants are finding it difficult to satisfy their demands.

It is really only in the past week or two, with the good grass growth and the warm weather, that cattle have begun to thrive properly and farmers are anxious to allow them to push on for the immediate future. One good finisher told me it was this critical period of thrive that would push cattle into significant value.

I heard of €5 flat across the board for Hereford and Angus bulls and steers, with 480c/kg flat refused. In general, U grades are being quoted and paid at 450-470c/kg. The Rs are at 445-455c/kg. Flat deals of 460c/kg are commonplace. The best I heard for O grades was 440c/kg, while some plants are quoting as low as 420c/kg.

Steer quotes and prices are in the range 450-460c/kg, but farmers need to get a few plants to quote before selling. Heifers are making 470-480c/kg, with the higher figure available from quite a few factories.

Commenting on the trade, IFA livestock chairman Henry Burns said prices were strong for steers, heifers and young bulls, especially in the south, where supplies were very tight.

He added that farmers were resisting downward pressure by the processors on cow prices, with 360-420c/kg being paid.

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Top quality R grade cows have made 400-420c/kg, while O grade cows in the midlands hit a high of €4/kg, but 360-390c/kg is buying the majority of cows. P grade cows are making 350-365c/kg.

Meanwhile, Bord Bia reported that the beef trade firmed again last week, on the back of relatively tight cattle supplies.

The best trade reported was for in-spec cattle. Trade continues to be helped by solid market demand across key export markets.

Base prices quoted for R grade steers under the Quality Payment System were €4.50-4.55/kg. Quotes for heifers were €4.70-4.75/kg. O grade cull cows made €3.70-3.80/kg.

To date this year, cattle supplies are running 51,000 head higher than the same period last year.

The majority of the increase in availability to date this year is evident in the steer and cow category.

In the UK, trade firmed as favourable weather conditions boosted demand for steak cuts. Supplies of round cuts were adequate to meet current demand levels. Trade for forequarter product continued steady.

Reported cattle prices from the AHDB showed little change during the past week, with GB R4L grade steers averaging Stg £405.8p/kg deadweight (equivalent to 500c/kg including VAT deadweight) for the week ended June 1.

On the Continent, trade remained firm across most markets during the week. Overall, trade was helped by ongoing tight supplies across the different key export markets.

Strong demand is evident for hindquarter product, with best trade for fillets and striploins.

In Italy, the R3 young bull eased by 8/c to €4.06/kg, while the O3 cow increased by 2/c to €3.28/kg VAT inclusive.

The R3 young bulls in France were unchanged at €4.05/kg incl VAT, while the O3 cow was also unchanged at €3.95/kg.

Ahead of the G8 Summit in Fermanagh later this month, IFA President John Bryan warned against a trade deal that would inflict severe damage on the Irish and European livestock sector as a result of a substantial increase in beef imports from an EU-Canada trade deal. Mr Bryan called on the Taoiseach Enda Kenny to intervene at the highest level to prevent what is being flagged as a very bad deal for the Irish and European beef and livestock farmers.

"Agriculture and particularly our hugely important beef sector cannot be sacrificed in these negotiations," Mr Bryan said, adding that a recent IFA study of the importance of the cattle and sheep sectors to the Irish economy by Professor Alan Renwick from UCD shows that the €2.3bn output at farm gate level creates total output of €5.7bn.

In addition the Irish cattle and sheep sectors support 100,000 farmers and over 50,000 jobs in the wider economy.

Irish Independent