February beef intake increased 26% in six years

Some of the estimated attendance of 225 at the recent Beef Plan Movement meeting in the West Lodge Hotel, Bantry, Co Cork. Picture: Andy Gibson

The continued strong supply of cattle to factories is weighing heavily on the ability of finishers to put any pressure on processors to lift prices, which remain unchanged for five months.

Over the last six years, the February intake of cattle has increased by around 26%, with an extra 8,000 head per week flowing in to the factories.

In 2013, the peak weekly intake for February was 30,600 head. Last month, the equivalent figure was 38,570 head.

Perhaps finishers should count their blessings, with processing and marketing strong enough to take such a big increase, without a total collapse in the trade.

Of course, finishers of young bulls are going through a very difficult period this year, trying to get their finished animals killed, because of the over-supply.

While the hardest hit on current prices is for the young bulls, all categories are feeling the effect of returns from processors which are inadequate to sustain beef production.

Beef finishers who have the option of changing to other enterprises are doing so in considerable numbers, and it is hard to blame them, because the margin over costs to sustain a beef enterprise is now completely inadequate.

Finishers who depend on the beef sector to make a living are being forced out for economic reasons.

Meanwhile, intakes at the factories continued very strong for last week.

There was an increase in the steer supply to over 12,000 head, while the number of heifers was maintained around 10,500, and about 5,000 young bulls were supplied.

The intake of cows remained strong at around 7,500 head.

Against this background, any sign of optimism for an increase in prices appears to have dissipated again.

The base for steers remains at 375 cents/kg, with nothing more to be got this week, and no sign of anything better on the horizon in the short term.

It is a downbeat outlook, but raising expectations without a basis to justify does not serve the sector, and right now it is hard to see how an uplift can be achieved, without downward movement in the supply.

The trade for heifers continues at a base of 385 cents/kg and, as for steers, the processors are not willing to concede a cent more.

The price has tightened for young bulls, with O-grade slipping back to 320 cents/kg and 340-345 cents/kg for the Rs.

Cow prices are largely unchanged at 255-260 cents/kg for P-grade, and edging up to 300 cents/kg for Rs at the top of the trade.

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