Beef trade: How the new in-spec bonus will be paid; plus prime cattle quotes unchanged

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.

Price breakdown:  
  • Base price + in-spec bonus + grid payment = total price;
  • €3.45/kg + €0.20/kg + €0.12/kg = €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.

Price breakdown:  
  • Base price + in-spec bonus + grid payment = total price;
  • €3.55/kg + €0.20/kg + €0.06/kg = €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.

Price breakdown:  
  • Base price + in-spec bonus + grid payment = total price;
  • €3.45/kg + €0.08/kg + €0.18/kg = €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.

Price breakdown:  
  • Base price + in-spec bonus + grid payment = total price;
  • €3.55/kg + €0.08/kg + €0.00/kg = €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.

Price breakdown:  
  • Base price + in-spec bonus + grid payment = total price;
  • €3.45/kg + €0.12/kg – €0.30/kg = €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.

Price breakdown:  
  • Base price + in-spec bonus + grid payment = total price;
  • €3.55/kg + €0.12/kg – €0.30/kg = €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.

MII

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.

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