Beef trade: Processors succeed to lower prime cattle quotes
Beef factories, for the most part, have succeeded in their quest to bring steer base quotes down to 390c/kg this week. In recent weeks, beef buyers were pushing to drop steer quotes back to such a level and it now appears that they have succeeded.
As it stands, the majority of plants are offering 390c/kg for steers on the grid. In addition, heifer prices have also come under pressure and most buyers are now offering 400c/kg to secure supplies.
Some farmers, especially those with large numbers of in-spec stock to market, have been receiving prices of 5c/kg above these base quotes.
Worryingly for producers, the latest factory cuts will have a major impact on the returns generated from cattle slaughtered over the coming days.
This is galvanised further when we look back at the prices achieved during the Christmas period. Over this time, steer and heifer base quotes stood at 400-405c/kg and 410-415c/kg respectively. On steers alone, that’s a price cut of €52.50 on a 350kg carcass.
Cow prices remain steady
Farmers marketing cows are in a good position this week. Given the strong demand for manufacturing beef, farmers may be able to squeeze an additional 5-10c/kg out of procurement managers when marketing such animals.
As it stands, buyers are offering 320-325c/kg to purchase P-grade animals. Procurement managers are starting negotiations with farmers for O-grade and R-grade cows at 330c/kg and 350c/kg respectively. Click here for a detailed breakdown of prices
Cattle throughput increases
There was an increase in the number of cattle slaughtered in Department of Agriculture approved beef export plants during the week ending January 21.
In total, some 33,231 cattle were slaughtered during that week – an increase of 1% or 314 head on the number processed one week earlier.
A jump in steer slaughterings is the primary cause of this increase. During the week ending January 21, some 10,809 steers were slaughtered in approved export plants – a jump of 584 head or 5.4% on the quantity witnessed during the preceding week.
In addition, young bull and aged bull numbers increased by 4.4% and 7.7% respectively. However, 158 fewer cows and 355 fewer heifers were processed during the week ending January 21.
- Young bulls: 5,908 head (+247 head or +4.4%);
- Bulls: 364 head (+26 head or +7.7%);
- Steers: 10,809 head (+584 head or +5.4%);
- Cows: 6,219 head (-158 head or -2.5%);
- Heifers: 9,931 head (-355 head or -3.5%);
- Total: 33,231 head (+314 head or +1%).
‘Winter finishers need cattle price increases not cuts’
The Irish Farmers’ Association’s (IFA’s) national livestock chairman, Angus Woods, outlined that moves made by the factories to lower cattle prices are sending the wrong signals to winter finishers and damaging confidence at farm level.
He also touched on cattle prices in the UK. Prices there, he said, have remained very strong.
“R-grading steers are making the equivalent of 442c/kg. Across the main EU markets, cattle prices are trading at 20-30c/kg above 2017 levels,” he explained.
Farmers feeding cattle in sheds since last autumn have run up considerable costs and the factories need to send a positive signal on price.
Woods also outlined that there is an exceptionally strong demand for beef, as there is no beef in the cold stores after the Christmas period. In addition, he discussed the manufacturing market and stated that burger sales were particularly strong.
Furthermore, he said that the IFA will continue to campaign for a strong live export trade – which is essential for price competition.
“The IFA is committed to ensuring that farmers are properly rewarded for quality in terms of the price they receive for their stock,” he concluded.