Prices back as factories revert to hardball tactics
THREE weeks ago a factory price pull of between 5-25c/ kg led to farmers deciding to hold stock rather than sell in a falling market.
The result was that the following week the expected factory numbers did not materialise which led last week to the factories deciding to restore prices to their previous levels and, in places, a bit more.
That move on the processors part brought the desired result, more stock. Now, like a tennis rally at Wimbledon, the factories yesterday served up another price cut on the back of those increased numbers.
This time, however, all the plants appear to be moving in unison as opposed to more random price cuts three weeks ago. This week’s cut is in the order of 10c/kg which leaves official quotes ranging from a high of €5.35+bonus of 5c/kg at Kepak to €5.20/kg plus 10c/kg at the two ICMs. Dawn Ballyhaunis is on just €5.20/kg. Sandwiched in between are Kildare Chilling on €5.30+10c/kg bonus and Moyvalley on a straight €5.30/ kg. Moyvalley is the only plant unchanged from last week.
On the ground, both the IFA’s John Lynskey and ICSA’s John Brooks are reporting prices averaging about €5.50/kg, with €5.40 /kg and €5.55/kg in places reported by the IFA man. Factory quotes for cull ewes stay unchanged with Kildare continuing to be the top payer on a price of €2.70 plus 10c/kg quality bonus. Next up are the two ICMs and Dawn on €2.70/ kg, with Kepak back at €2.65/ hd plus their quality bonus of 5c/kg.
Prices reported on the ground are running ahead of these quotes by anything from 10-30c/kg at €2.70-3.00/kg. Kildare Chilling remain the only factory officially quoting for hoggets on a price of €4.00/ kg plus 10c/kg bonus.
One of the issues that factories are not happy about are the number of what they claim to be light or under-finished lambs coming on the market.
Lighter lambs
A Kildare Chilling spokesman told me that they will be “deducting prices” for these types: “Lighter lambs under 40kgs will not kill out and there is a limited outlet for them,” he said.
John Brooks of ICSA was not impressed, given that for years factories were not willing to pay for heavier carcases.
“If there was ever evidence that factories need to push up their weight limits this is it,” he said.
“Factories have been getting free meat for years and claiming it a liability, now we know different.”
He added the fear now is that the factories might attempt to bring in cheaper heavy carcases from Britain and the North to compensate.
Bord Bia reports that the French market is quiet with large amounts of imported lamb coming on stream. That said grade one Irish was reported as making around €5.62/kg including VAT for the first week in July.