Factories renew attack on prices
Steers Heifers Cull Cows Young Bulls LAST week on the Irish Independent stand at the Ploughing, IFA president Joe Healy summarised the relationship between Irish cattle farmers and processors.
He began his analysis of this ‘relationship’ by contrasting the different approach adopted by the dairy sector to this year’s farming difficulties as opposed to that of the beef processors.
The dairy sector, Mr Healy commented, actively sourced fodder as well as introducing schemes to assist with bill payment. He then asked what had the beef processors done to help their suppliers during this very trying year? “Their idea of help over the last month has been to drop payments for cattle by €70-80/hd,” Mr Healy told the audience.
Yesterday, factories renewed their assault on prices by attempting to pull both bullocks and heifers back another 5c/kg, on the back of a second week where kill numbers rose above 38,000hd. The kill actually hit 38,336hd to be precise.
Factories are putting the word out that prices are headed for €3.70/kg for bullocks, with heifers to follow at €3.80/kg. There is also a rumour being circulated that the 40,000hd per week slaughter threshold could be breached very soon.
That’s one side of the coin. The other side says that far from creaking under the weight of this autumn’s increased numbers, factories are actually well tooled up to handle this supply surge.
Or as put by a farmer I met at Ploughing: “If they’re buying cattle, they have to be selling beef.”
In relation to the bare bones of what’s being paid, I spoke to several agents who yesterday continued to give €3.75/kg for bullocks and €3.85/kg for heifers. When I questioned them on prices of €3.70 and €3.80, the reply I got was: “No one told me [to drop the quotes], and I’m not going to ring the office. Let them ring me.”
Of note as well is there are no statements coming from the processor side of the house saying that they can’t find markets for these extra numbers.
Concerns about Brexit and sterling don’t appear to be consistent, and there are no reports of anything going into storage. However, I would be surprised if some shake wasn’t been put away for when things get tighter.
IFA were scathing this week about current factory prices.
“The market facts, as provided by the AHDB (UK Agricultural and Horticultural Development Board) show that the R3 grade steer price in the UK is £3.80/kg, which is the equivalent €4.47/kg including VAT,” said IFA livestock chairman Angus Woods.
Back on home soil the current price malaise saw cows fall back potentially by 5-10c/ kg yesterday. That leaves your R grade cow at around the €3.20-3.30/kg mark, with O grades slipping back to €3.103.00/kg, and better P grades at €2.70-2.90/kg.
On the bull side, prices continue to slip, with the 16-month to 24-month stock making €3.90-3.85/kg. R grades are on €3.80-3.75/kg, and O grades at €3.60-3.70/kg.
Under 16-month bulls were reported yesterday to be working off a base of €3.85-3.90/kg.
The question of where prices might go, or whether the market might turn, is never ending. And while it may be one thing to battle with factories on price, once you’ve got your price and your cheque, the bigger question this autumn is would you be prepared to invest that money in the winter game?
With pit silage now freely being quoted at €50/tonne, nuts at €300/tonne, and factory prices appearing to be going only one way — getting men to finish cattle this winter could prove difficult.