Factories creating threetier system– with small farmers at the bottom
Factories continue to actively seek out the numbers they need, but they are attempting to tighten up on the money side, with very little, officially, being offered in the way of fringe benefits.
The line from the factories runs like this: “We’re back 5c/ kg to €5.10/kg for bullocks and €5.15/kg for heifers and that’s it.”
However, for those who have bigger numbers or better quality, deals are still being done.
So it’s the smaller farmer with the jeep and box with a couple of bullocks or heifers who is on that €5.10-5.15/kg, or the dairy farmer with handy numbers of culls cows who doesn’t ask what the price is who is balancing the books for the processors.
For those with better-conformation stock, base prices range from €5.15 -5.20/kg.
It is primarily all about the numbers, with various factories last week paying up to €5.20/kg flat in the south for big numbers of Friesians, while up to €5.25/ kg flat was reported in the midlands for black-and-whites.
The Angus bonus has moved on in many places to 25c/kg, but factories don’t appear to have added that extra 5c/kg when offering flat prices for the breed, with €5.60/kg continuing to be the line in the sand.
The Hereford bonus has also moved, with several finishers reporting 20c/kg as being the new payment.
To put all this in context, 12 months ago factories were quoting €5.20-5.25/kg for bullocks, with heifers on €5.30/kg and the occasional €5.35/kg.
Young bulls under 24 months were quoted at €5.50-5.40/kg, while on the cull cow side R grades were getting €5.00/kg with O grades as high as €4.80/ kg as demand for manufacturing beef underpinned the market.
The market situation today is not too different, but the kill of 136,157 at exporting plants for January is 4,870 stronger than for the first four weeks of 2023.
While factories are putting out the message that prices have to come back, their actions at marts paint a very different picture.
Several farmers told me they refused what was on offer from their local agent, deciding instead to show the same animals in their nearest mart and making €100-150/hd better.
And yes, you’ve guessed it, if he wasn’t the actual buyer, the agent who couldn’t come up to the mark on price initially was invariably the under-bidder.
Cow numbers continue to make up around 26pc of the weekly kill, and for those with good flesh, an O grade will get you €4.40/kg, with better P grades on €4.20/kg.
The trick in getting those prices however is flesh cover and kill-out. One factory agent told me: “Some dairy farmers either don’t understand the concept of grading, flesh and fat cover and kill-out or they think the factories are running some sort of charity for their benefit.
“The difference between comparing good cows to canners is like comparing pears to peanuts.”
Prices for bulls under 24 months also appear to holding, with Us on €5.40/kg and Rs on €5.25-5.30/kg, with R grading Friesians at €5.00-5.10/kg — again depending on flesh and fat cover, as well as numbers.
In summary factories are trying to ease back on prices and have created a three-tier system. First are those on contract, second are those with bigger numbers and third are the smaller farmers forced to take what they are being offered so that the other two can get that bit extra.
“Some dairy farmers either don’t understand the concept of grading, flesh and fat cover and kill-out or they think the factories are running some sort of charity for their benefit”