Farm Ireland

Wednesday 21 February 2018

Viewpoint: Hot prices of 'four-legged lawn mowers' spells trouble

Questions have been raised about price currently being paid for cattle.
Questions have been raised about price currently being paid for cattle.
Declan O'Brien

Declan O'Brien

Are the prices being paid for store cattle sustainable?

Well the answer to that question has to be no if conversations with a number of people involved in the trade are to be believed.

A few well-known livestock auctioneers I talked to over the past week all expressed concerns at the prices being paid for store cattle at the moment.

While not wishing to dismiss the need for the sellers to turn a few euro on their stock, all of those I spoke to questioned the wisdom of those doing the buying.

One man in the midlands said farmers at ringside had been "brave to the point of crazy" over the last month.

He admitted that cattle prices in the mid-east of the country had been helped by the activities of stud farm buyers but he said the under-bidders to the bloodstock concerns were, more often than not, ordinary beef farmers.

"We've had some very flashy prices paid in the mart over the last fortnight or three weeks. We had 300kg heifers making over €3.20/kg.

"You'd have to ask yourself how farmers hope to make a return on those sorts of prices," one livestock auctioneer commented.

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"It's one thing for stud buyers to pay that sort of money. They are generally looking for four-legged lawn mowers, but it's a different matter when you're trying to turn a profit on this stock after paying a king's ransom for them," he added.

Another livestock auctioneer in the east of the country described the willingness of farmers to pay over the odds for stock at the moment as "foolish confidence".

He said the trade was not "hot" at the moment but "sizzling".

A seasoned campaigner in the cattle trade, he said what some farmers were willing to pay for stock of late bordered on "reckless".

Like his colleague, this man had seen in the region of €3.30/kg being paid for heifers and bullocks under 400kg over the past week.

He wondered how the buyer hoped to get his money back - not to mind turn a margin on the cattle bought.

"The longer I'm in this business the more I realise that I know very little about it," he commented.

"The one thing I do know is that some men know a lot more than me when it comes to cattle prices.

"One fellow who sold cattle last week was planning to sell them in early March but held them because he reckoned they were going to get dearer. He was a happy man after the sale."

Suggestions that cattle numbers will be tight for the remainder of the year appear to be fuelling the recent price lift.

Let's hope for farmers' sake that these suggestions are right.

Indo Farming