Beef trade: Factory quotes sound like a ‘broken record’

Yet again, farmers and finishers marketing beef cattle continue to battle against the odds this week, with quotes largely unchanged across the board. The only positive farmers can look to is the mart trade.

In recent times, they have faced problems with getting bulls killed, while low base prices are hampering any chance of farmers making a decent profit.

Looking back to the very same week in 2018, 395c/kg was on the table for steers and heifers were quoted 10c/kg higher at 405c/kg.

As has been the case for weeks now, factory buyers are quoting 375c/kg for steers and 385c/kg for heifers (excluding quality assurance (QA) bonuses).

To put this into context, a 380kg base steer carcass was worth the equivalent of €1,501 (excluding bonuses) this time last year; the potential returns have now dropped to €1,425.

The lower factory quotes have left farmers counting the costs and have also raised serious concerns over the attractiveness of the enterprise. And, to add to this, the uncertainty surrounding Brexit has left farmer confidence very challenged.

Looking at the cow trade, it must be noted that there is a variation in the prices being quoted to farmers. This depends on the location and demand of individual processing plants.

Most beef cattle buyers are starting negotiations with farmers at 300c/kg for R-grade cows and 280-290c/kg for O-grade types. Looking at cows falling into the P-grade category, these animals are selling at 260-270c/kg. U-grading cows are topping 330c/kg.

The bull saga has seemed to ease slightly, with some farmers getting bulls slaughtered easier. This week, factory agents are quoting 330-340c/kg for O-grade bulls, while R-grades are moving for 360c/kg; procurement managers are quoting 370c/kg.

Again, weight restrictions are causing some farmers problems when it comes to marketing their bulls.

However, with a drop in the numbers slaughtered across all categories with the exception of young bulls and aged bulls during the week ending February 17, will there be more pressure on beef processors to pay more for their raw material?

Supplies

Meanwhile, moving to cattle supplies, official figures show that some 38,198 cattle were processed in Department of Agriculture approved export plants during the week ending February 17 – a drop of 372 head.

Contributing to this fall was a 21 head reduction in steer slaughterings, cow numbers were back 559 head and heifers were down 737 head. However, increases were witnessed in both the young bull and aged bull categories – up 13 head and 124 head respectively.

However, these reductions were counteracted by the number of calves slaughtered.

Week-on-week beef kill changes (week ending February 17):
  • Young bulls: 6,460 head (+13 head or +0.2%);
  • Bulls: 647 head (+124 head or +23.7%);
  • Steers: 11,752 head (-21 head or -0.2%);
  • Cows: 7,422 head (-559 head or -7%);
  • Heifers: 10,760 head (-737 head or -6.4%);
  • Total: 38,198 head (-372 head or -0.9%).

Official figures also show that the total cattle kill for the year – up to the week ending February 17 – stands at over 250,000 head.

Throughput increases have been witnessed in all of the major categories with the exception of aged bulls, as these slaughterings are back 67 head when compared to the corresponding period in 2018.

Year-on-year beef kill changes:
  • Young bulls: 42,772 head (+3,808 head or +9.7%);
  • Bulls: 3,034 head (-67 head or -2.1%);
  • Steers: 76,991 head (+1,276 head or +1.6%);
  • Cows: 50,957 head (+4,424 head or +9.5%);
  • Heifers: 77,244 head (+7,327 head or +10.4%);
  • Total: 252,805 head (+17,256 head or +7.3%).

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