Beef price gap between heifers and cows continues to narrow

Beef cattle prices continue to remain under pressure as the majority of processors are now offering 380c/kg for steers and 390c/kg for heifers.

Last week, processors moved to tighten their grip on the market and many worked to lower steer and heifer quotes from 385c/kg and 395c/kg respectively back down to today’s offerings.

Despite these lower quotes, agents are keen to secure stock and have been an ever constant presence at the ringside in recent days.

In addition, some sellers have been able to secure deals at 5c/kg over the base price and agreements have been reached that has seen some factories waiving haulage charges in a bid to secure supplies.

However, the price gap between prime heifers and cull cows continues to narrow.

As has been the case in recent weeks, the cow trade has remained largely unchanged. Quotes of 310c/kg are currently available for P-grade cows, 320-325c/kg is on offer for O-grade animals and factory buyers are starting negotiations with farmers at 340-345c/kg for well-fleshed, R-grade cows. Click here for a detailed breakdown of prices

‘Factory price cuts must stop’

Last week, IFA (Irish Farmers’ Association) President Joe Healy said beef price cuts at the meat factories must stop as they are squeezing out any chance of profit for farmers grazing cattle this year.

He said €90 per head had been taken off cattle prices over the last few weeks and this is costing farmers more than €2 million per week.

The president warned the factories that they need to act responsibility – as the price cuts are very damaging and diminishing confidence at farm level.

He highlighted that average beef farm incomes were just €16,853 in 2016, including direct payments.

Healy added that the factory price cuts are not justified based on market returns, adding that cattle prices in the main Irish market in the UK are equivalent to €4.42/kg.

Supplies remain strong

Some 31,228 cattle were slaughtered in Department of Agriculture approved beef export plants during the week ending August 13.

When compared to the previous week, that’s a drop of 1,546 head or 4.7%. However, it must be noted that the majority of beef plants closed their doors on August 7 due to the back holiday.

Despite this closure, beef cattle supplies remained strong and only a slight reduction was witnessed in the prime cattle kill as steer and heifer throughput declined by 191 head and 242 head respectively.

There was also a reduction in the number of young bull and aged bull slaughterings during the week ending August 13. In total, some 1,998 young bulls and 553 aged bulls were slaughtered in approved beef export plants – a collective fall of 246 head.

However, there was a 13% (892 head) reduction in cow slaughterings during the second week of August, as just 5,961 cows were slaughtered in Irish beef plants.

Week-on-week beef kill changes (week ending August 13):
  • Young bulls: 1,998 head (-213 head or -9.6%);
  • Bulls: 553 head (-33 head or -5.6%);
  • Steers: 15,067 head (-191 head or -1.3%);
  • Cows: 5,961 head (-892 head or -13%);
  • Heifers: 7,620 head (-242 head or -3.1);
  • Total: 31,228 head (-1,546 head or -4.7%).

Main markets

The British beef trade remained relatively steady last week, according to Bord Bia, as little change in prices was recorded, while demand and supply remained finely balanced.

Prices from the AHDB show that British R4L steers made the equivalent of 424.33c/kg for the week ending August 4. Meanwhile, British and Northern Irish heifers made the equivalent of 423c/kg and 411c/kg respectively.

Moving on to France, Bord Bia says the market remained quite last week on the back of the holiday season.

Trade remained best for bavettes and ribs of beef, while demand for offal products remained slow. In addition, a limited number of retail promotions and such promotions focused on French-origin rump and shank beef.