Ship steadies as factories crank up throughput

Steers Heifers Cull Cows Young Bulls REPORTS from across the country last weekend indicated that factory prices for beef had stabilised.

The attempt to pull bullocks back to €3.70/kg and heifers to €3.80/kg last week appears to have come unstuck.

Base prices opened at €3.75/kg and €3.85/kg respectively yesterday as factories continued to crank up production. I say that because with numbers heading ever upwards – last week’s kill was up another thousand on the previous week at 39,278 – not one word has come from factories about not being able to deal this surge.

That 39,278 figure also helps explain why some factory agents were still trying their hand at €3.70 and €3.80 for cattle yesterday morning.

Have prices bottomed? I would hope so.

However, another week of 39,000+ kill would see that floor of €3.75 for bullocks and €3.85/kg for heifers well tested. For now, however, the ship has steadied.

Also remaining steady are prices for cull cows and bulls. Cows see R grades continuing on 330/kg, with O grades hovering around the €3.00-3.10/ kg mark, while your better P+ grade is on €270-290/ kg. Lesser grades are further back.

Bull prices see under-16month stock operating off of a €3.85-3.90/kg base, with 16-month to 24-month bulls flat priced from €3.90/kg to €3.85/kg for U grades, with R grades on €3.80-3.75/kg, and O grades on €3.70-3.60/kg.

With the Beef Forum due to reconvene this Wednesday I am disappointed to see that the IFA has decided to boycott the meeting on the basis that “Minister Creed has allowed the factories to run amok with systematic cattle price cuts”.

“Cattle price cuts” are what you get when either there is no market or the market is over-supplied, as is the current case. Expansion in the dairy sector has flooded the market with very poor quality stock, thus pushing down overall prices.

Should beef farmers protest outside their dairy farm neighbours’ gate? Or do the IFA think that the government should nationalise the processing sector?

To be fair to the factories they have not once used the excuse that they can’t find a home for all the extra product they have produced to date this year.

Concern

Of more concern to them come Wednesday I suspect will be questions about the grid and the QPS due to be raised by ICMSA.

Commissioned by the ICMSA, the Quantitative Assessment of the Beef QPS and Related Matters report makes for fascinating reading.

Almost eight years into the QPS this report makes very strong arguments that the attempt to influence beef breeding by paying for better conformation or “quality” stock has failed spectacularly.

This report cites Department figures that show in 2017 83.6pc of steers either fell into penalty boxes on the grid or fell outside the QPS system entirely.

This totally undermines the argument that to survive the beef processing sector needs masses of suckler-bred stock.