Beef price: ‘Farmers should be demanding a base price of €4/kg’

“Farmers should be demanding a new minimum base beef price of €4.00/kg.”

These were the words of the Irish Farmers’ Association’s (IFA’s) Livestock Committee chairman, Angus Woods.

According to Woods, the majority of cattle finished off grass are now gone and with the Christmas market demand in full swing, factories are busy sourcing cattle “out of sheds”.

In relation to throughput, last week’s 4,369 head reduction in the beef kill – to 33,064 head – has increased the pressure on the beef processors to increase prices paid to beef farmers.

It seems the stalemate between the factories and the farmer has come to an end, as some procurement managers add 5c/kg onto base quotes.

Steers are currently sitting at a base of 375–380c/kg, while heifers are trading from 385-390c/kg in most cases.

Again, farmers – especially those with large numbers of in-spec stock – have been receiving prices of 5c/kg above base quotes.

In addition, cow prices have also remained relatively unchanged from last week and most buyers are offering 300-315c/kg for P-grade and 315-335c/kg for O-grade animals. R-grade cows are making 335-350c/kg. Well-fleshed U-grade cows are trading for 355-370c/kg.

The IFA Livestock Commitee chairman said: “Based on the higher UK and EU market returns, a substantial beef price increase from the factories was justified.

“Winter finishers need an immediate price increase and cattle prices need to continue to rise into Christmas.

Teagasc figures show that winter finishers need a beef price in the range of 430-450c/kg.

Supplies

Cattle supplies at Irish export meat plants for the week ending November 5 saw a significant drop of 4,369 head. However, even with this decrease, there was a 7% or 2,000 head increase on the number of cattle slaughtered in comparison to the corresponding week during 2016.

Of the 33,074 cattle slaughtered during the week ending November 5, just over 65% of these animals were steers and heifers. Some 13,503 steers were slaughtered in beef plants that week – a decrease of 2,390 head – and heifer throughput stood at 8,215 head.

Other throughput decreases included young bulls (-366 head) and cows (-1,025). However, aged bulls throughput increased by 45 head.

Week-on-week beef kill changes (week ending November 5):

  • Young bulls: 3,039 head (-366 head or -10.7%);
  • Bulls: 549 head (+45 head or +8.9%);
  • Steers: 13,503 head (-2,390 head or -15.3%);
  • Cows: 7,726 head (-1,025 head or -11.7%);
  • Heifers: 8,215 head (-588 head or -6.6%);
  • Total: 33,074 head (-4,369 head or -11.6%).

Main markets

According to Bord Bia, the trade recovered slightly in Britain last week, on the back of an ease in supplies and little change in demand.

In terms of prices, the AHDB (Agriculture and Horticulture Development Board) reported that R-grading steer prices increased marginally and averaged 425c/kg for the week ending November 5. R-grading heifers averaged 415c/kg.

Moving to France, Bord Bia says, there was little change in the trade last week. Looking at prices, R-grading young bulls averaged 397c/kg, while O-grading cows made 325c/kg on average.

Bord Bia reported that, in Italy, the trade remained relatively steady last week for most products. Looking at producer prices, R-grading young bull prices averaged 395c/kg, while O-grading cow prices stood at 292c/kg.

In addition, the market remained relatively balanced in Germany, with an increased demand for young bulls.

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