As of last week, new in-spec bonuses have been introduced on the back of the ‘Beef Sector Agreement, September 15, 2019’, which was agreed by all stakeholders involved in the beef sector reform talks as a result of weeks of protests.
The bonuses detailed below will be paid on top of any breed-specific bonuses, producer group bonuses or farmer-factory agreed prices.
Moreover, the new in-spec bonus structure only refers to steers and heifers; young bulls are not included.
Firstly, an additional 20c/kg will be paid on steers and heifers on the grid that grade in the yellow area below.
In order for an animal to qualify for this in-spec bonus, the animal must be under-30 months at the time of slaughter. In addition, the animal must also have a conformation and fat score of any of the following:
- Conformation: U+, U=, U-, R+, R=, R-, O+, O=;
- Fat score: 2+, 3-, 3=, 3+, 4-, 4=.
Animals must have a maximum of four farm residencies and be on the last farm – that is registered with Bord Bia under the Sustainable Beef and Lamb Assurance Scheme (SBLAS) – for at least 60 days.
An additional 10 days (minimum) must be spent on another quality-assured (QA) farm.
Example:
- Animal: Steer;
- Age: 28 months;
- Grade: U-;
- Fat score: 3=;
- Base price: €3.45/kg.
Provided this steer meets all the criteria mentioned above, it will achieve a payment of €3.77/kg.
Example:
- Animal: Heifer;
- Age: 26 months;
- Grade: R+;
- Fat score: 3+;
- Base price: €3.55/kg.
Provided this heifer meets all the criteria mentioned above, it will achieve a payment of €3.81/kg.
Additionally, a new bonus of 8c/kg for steers and heifers aged between 30-36 months, which meet all non-age related existing in-spec criteria (mentioned above), and – up to now – did not receive any bonus payment will be paid.
Again, the steer or heifer must also have a conformation and fat score of any of the following (orange area):
- Conformation: U+, U=, U-, R+, R=, R-, O+, O=;
- Fat score: 2+, 3-, 3=, 3+, 4-, 4=.
Example:
- Animal: Steer;
- Age: 32 months;
- Grade: U=;
- Fat score: 3+;
- Base price: €3.45/kg.
Provided this steer meets all the criteria mentioned above, it will achieve a payment of €3.71/kg.
Example:
- Animal: Heifer;
- Age: 31 months;
- Grade: R=;
- Fat score: 3+;
- Base price: €3.55/kg.
Provided this heifer meets all the criteria mentioned above, it will achieve a payment of €3.63/kg.
Finally, a new in-spec bonus of 12c/kg for steers and heifers under-30 months that grade O- and have a fat score of 4+ is now available; age, residency and movement criteria apply.
The new bonus is highlighted in blue below.
Example:
- Animal: Steer;
- Age: 27 months;
- Grade: O-;
- Fat score: 4+;
- Base price: €3.45/kg.
Provided this steer meets all the criteria mentioned above, it will achieve a payment of €3.27/kg.
Example:
- Animal: Heifer;
- Age: 26 months;
- Grade: O-;
- Fat score: 4+;
- Base price: €3.55/kg.
Provided this heifer meets all the criteria mentioned above, it will achieve a payment of €3.37/kg.
What are factories offering?
While some factories were slow to resume processing last week, the majority of beef plants are back open.
Steers are currently still sitting at a base of 345-350c/kg, while heifers are trading 10c/kg higher at 355-360c/kg.
Bull prices are under pressure and factory appetite for these animals is low in some cases. Factory agents are quoting in the region of 340-350c/kg for R-grade bulls and upwards of 350-355c/kg for U-grades. O-grade bulls are hovering around the 315-330c/kg mark.
Wet weather has put more pressure on both beef and dairy farmers, and these farmers have no other option but to market their animals. This is an add-on to the pool of cattle that processors can choose from as a result of the protests.
Cow prices are also under pressure and beef buyers are starting negotiations with farmers for P-grade cows at the 280-285c/kg mark, with O-grades at 290-300c/kg. Moreover, R-grading cows are securing 300-315c/kg depending on quality.
With regards to cattle throughput, during the week ending September 22, just 10,012 cattle were slaughtered in beef processing facilities – a fall of 1,663 head.
However, last week’s kill is expected to have increased on this level.