Farm Ireland
Independent.ie

Saturday 25 November 2017

'Unforgiving' factories slaughter beef prices

Joe Healy

A headline over the weekend read that Lucinda Creighton's fate lay in the hands of 'unforgiving Kenny'.

Welcome to a world similar to that occupied by beef finishers for years Ms Creighton. Irish beef farmers' fate has been in the hands of meat factories for too long – and unforgiving is far too mild an adjective to use when describing them.

Factories were not satisfied just to pull prices this week, they slaughtered them. The tables will show that steer and heifer quotes and prices were pulled by between 5c/kg and 10c/kg over the past week, with the young bulls down by 10-15c/kg.

The drop in a 300kg heifer carcase reflects a loss of between €110-120 or 7-8pc over the past month. To have this happening when there is a shortage of cattle and very strong demand in Britain is difficult to take.

British farmers are still being paid the equivalent of 500c/kg for R4L steers, while the weekly kill here remains below the 27,000hd mark.

It is extremely worrying and makes one fearful of what will happen when the 113,000 extra cattle (aged 12-18months on April 1 this year) come on stream.

Steer prices on the grid seem to have slipped to a range from 420-425c/kg, while the heifers are selling for 435-440c/kg, with 430c/kg mentioned for the non quality assured (QA) types. The QA payment of 12c/kg is on top of the grid price mentioned for suitable stock.

Young bulls have been hit even harder. The best price I heard was 430c/kg for a mix of R and U grades. Quotes for the Us are in the 420-430c/kg bracket, with the Rs at 405-420c/kg. O-grade quotes range from 385-390c/kg.

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The cut in the cull cow quotes is hitting up towards 20c/kg. Top quality R and U grades are making 340-475c/kg. O grades vary from 320c/kg to 340c/kg, while P grades are now at 305-320c/kg.

The IFA's Henry Burns slammed the latest price cut by the factories.

"At a time when cattle supplies are tight and prices in our main export market in the UK are very solid at close to €5/kg, the price cutting tactics of the Irish factories cannot be justified," Mr Burns said.

He said the IFA would continue to work to increase the live trade to Britain and open up more competition in the beef trade.

Mr Burns called on Agriculture Minister Simon Coveney to get more boats and more live exports flowing to international markets.

He also called on Minister Coveney to take immediate action at opening up the live export trade to Britain and instil some real competition into the livestock sector.

According to the latest figures from Bord Bia, cattle supplies so far this year are running 65,300hd higher compared to last year's levels. The majority of the increase in availability to date is evident in the steer and cow category.

EXPORTS

On the Continent, trade remained steady across most markets during the week. Overall, trade continues to be helped by ongoing tight supplies across the different key export markets. Demand in general for hindquarter product remains solid.

In Italy, the R3 young bull price including VAT stood at €4.23/kg, while the O3 cow price is making €3.21/kg. The R3 young bull price in France was making €3.99, while the O3 cow price was generally around €3.66/kg.

In terms of Irish finished cattle availability, Bord Bia's Joe Burke said that 2013 has been characterised by extra numbers across most categories of animals. Up to the end of June, total disposals were some 9.5pc ahead of the equivalent period last year, at 690,000hd.

The strongest increase has been evident in steer and cull cow disposals, which have been 20pc and 13pc higher, respectively. However, Mr Burke pointed out that factory throughput was just under 1.4m head last year, which was the lowest cattle kill for more than 15 years. Total slaughterings this year are likely to be in the region of 1.54m, which still represents a relatively low figure in the context of that same 15 year period.

A recent analysis of the Department of Agriculture's AIM (Animal Identification and Movement) database reveals a growing number of animals approaching slaughter age.

The most dramatic increase is evident in males aged between 12 and 18 months, which were collectively 113,000hd higher than the previous year. This mainly relates to spring 2012 born animals. Higher numbers are also evident in the 18-24 and 24-30 month age categories.

Many of the extra female cattle actually relate to dairy heifers. These will mostly join the breeding herd, so in the short term they won't directly affect cattle supplies. However, the abundance of replacement stock, together with the strong cow trade, is encouraging producers to cull some of their less productive cows.

Irish Independent