RINGSIDE

Factories continue price pull

THE headline on this column last week was ‘Cattlemen counting the cost of dairy expansion’ a reference to the fact that dairy farmers had begun to unload cows due to lack of grass which caused factory prices for beef to come under pressure. With the sun continuing to beat down yesterday morning, and temperatures again forecast to head up close to 30°C this week, the fallout from those extra cull cow sales continues.

Last week’s kill was reported as being 33,898, and while only 47 ahead of the previous week’s kill of 33,851, that 33,898 figure hides the fact that numbers are staying high because of the supply of cull cows that are being forced into the system because of the drought.

Figures for the week ending June 24 show that that week’s cow kill to be 8,451 versus 7,643 for the same week in 2017 — that’s almost a 10pc increase.

While detailed figures for the number of cows that went through the system last week were not readily available yesterday, anecdotal evidence would seem to indicate that last week’s figures contain another increase as reports circulate that some plants that specialise in cows have seen their numbers nearly double in a fortnight.

What all this means for those of you with bullocks to sell is that yesterday morning, bullocks were being quoted at €4.00/kg with an extra 5c/ kg possible if you are a good customer, while heifers appear to have steadied at the €4.10/ kg mark.

The situation in relation to those cows is that prices for Os have now slipped to between €3.30-3.20/kg, with P+3s on €3.15-3.10/kg. The lesser P grades are further back at €3.00/kg and less. R grade cows were reported as making anything from €3.60-3.40/kg. In short, cow prices have slipped by 20c/kg in a week and 40c/kg in a fortnight. Also suffering is the price of young bulls, with quotes yesterday appearing to be 10c/kg back on last week. U grades ranged from €4.10-4.00/ kg, Rs were at €4.00-3.90/kg, while the O grade animal was being quoted as low as €3.75/ kg but was generally making €3.80-3.85/kg.

Soft landing

I mentioned last week that my postman was doing a parachute jump for charity and implied beef farmers might need to attach a parachute of their own to factory prices if they hoped for a soft landing in the current crisis.

Make no mistake, the factories will kill those bigger numbers of cows, but reports I’ve heard indicate that many plants are already at capacity which means if you’re flat to the board killing cows, how do you make room for everything else? And never forget cheaper beef not fancy conformation is a factory boss’s main concern.

IFA president Joe Healy criticised the factories for taking advantage of the drought conditions.

“The factories are taking advantage of the drought conditions and over the last four weeks have cut 20c/kg off the price, or up to €80 per head, which is the profit margin in most cases. Prices in our main export market in the UK remain strong and steady, with the R3 steer price at £3.79/kg, equivalent of €4.54/kg,” Mr Healy said.