Beef prices at the factories have been hit this week adding to the woes and the losses for the finishers at a critical point in the season.
The base prices being offered for both the steers and heifers have been reduced by 5c/kg bringing the steers back to 370c/kg and heifers to 380c/kg.
A few weeks ago there was a slight indication that the price which has been frozen since November was about to harden a little. The optimism was short lived and replaced by another round of resilience by the processors to hold the rein on any upward movement in the prices.
While the concerns over Brexit and the high level of the weekly kill to date in 2019 remain firmly planted in the minds of all suppliers to the factories, the downturn in the prices this week is another blow to confidence in the beef sector, which is at a low ebb.
Spring finishers have been losing heavily on their enterprises at the low prices being offered by the processors since the beginning of the year. The further reduction in the prices this week takes an additional €20/head off the returns, increasing losses for the 2019 season.
The reduction in the quotes this week has been across all categories with the exception of cows.
Some of the factories are still paying last week’s prices for young bulls, while others have reduced their offering by up to 5c/kg.
The cow prices continue at 255-265c/kg for the P grade cows with the O grade cows at up to 280c/kg and R’s still capable of making up to 300c/kg.
The comparison is now being drawn with the prices in the UK, and Irish suppliers are pointing out that they have received no real benefit from the improvement in the sterling/euro exchange rate — which has now dropped from 90p/euro to 85p/euro with most of the prime beef from the factories going into the UK market.
The price difference between similar grade prime beef prices in the UK versus Ireland has now increased to 40c/kg which adds up to around €150/head and would go some way towards bridging the losses which are currently being experienced by farmers.
Total intake at the factories for last week was just over 34,000 head, which was back on prior weeks, but account has to be taken of the shorter working week following the St Patrick’s day national holiday.
The intake this week will be a more accurate measure as to whether the drop in supply is for real and some end to the very large supplies has come within sight.