Supply catches up to demand as beef quotes stagnate
Just over 1.2 million cattle have been slaughtered in Ireland so far this year. That’s an increase of 65,924 head or 5.6%, when compared to the corresponding period last year.
Of these cattle, prime steer and heifer slaughterings accounted for over 65% of the total beef kill – up from 64% of the beef kill in 2016.
Despite this position of surplus, factories were particularly keen to secure stock over the last three weeks. In many instances, buyers were willing to add an additional 5-10c/kg on to base prices to tempt farmers to market their stock.
However, factories are slower to offer such deals this week; many are quoting 375-380c/kg for steers and 385-390c/kg for heifers.
A number of procurement managers told AgriLand that a “big kill” is on the cards this week. But, it’s important that farmers keep the pressure on buyers to ensure that they gain the maximum return for their cattle.
Angus Woods, IFA National Livestock Chairman, said: “Cattle prices remain stable, with higher prices being offered for larger lots.”
He added that some farmers are being offered 385c/kg for steers and 395c/kg for heifers this week. On young bull prices, he said: “Bulls are making 380c/kg for R grades and 390c/kg for U grades; some top prices of 400c/kg are being paid.”
Cows in a strong position
Furthermore, farmers marketing cows are in a particularly strong position this week. This comes as factory-fit cow numbers remain tight.
And, 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, most buyers are offering 340-350c/kg for R-grade cows; 320c/kg is on the table for O grades; and factories are offering 310c/kg for the plainer, P-grade animals.
There was a marked increase in the number of cattle slaughtered in Department of Agriculture approved beef export plants during the week ending September 24.
In total, some 36,152 cattle were slaughtered during that week – an increase of 4.4% or 1,636 head on the number processed one week earlier.
A jump in steer slaughterings is the primary cause of this increase. During the week ending September 24, some 18,658 steers were slaughtered in approved export plants – a jump of 2,480 head or 15.3% on the quantity witnessed during the preceding week.
However, all of the other categories of beef cattle actually posted throughput declines. Young bull and aged bull numbers decreased by 17.5% and 13.4% respectively. In addition, 183 fewer cows and 173 fewer heifers were processed during the week ending September 24.
Lack of competition in the beef market
Last week, IFA (Irish Farmers’ Association) President, Joe Healy said the Competition and Consumer Protection Commission (CCPC) must take its head out of the sand and address the serious lack of competition in the Irish beef sector.
His comments followed the announcement by the CCPC to clear the acquisition of Dunbia by Dawn Meats.
He said: “It is the responsibility of the CCPC to ensure that there is competition in the beef sector, but it is failing its duty in this regard.
IFA met the CCPC and put a detailed independent report to it, addressing the lack of competition in the beef sector.
“Farmers expect the CCPC to utilise the powers it has under the law to undertake a full and proper investigation of all the issues around the lack of competition in the beef sector.”
It is farcical for the CCPC, he said, to state that it was not provided with any information to suggest the existence of any form of “coordination of prices” for the purchase of cattle.
“The CCPC should use its statutory powers to unearth this information. If cannot expect that it will be handed to them by the industry.
“Farmers have no confidence in either the desire or the ability of the CCPC to tackle this problem,” he said.