Up to 99 as factories vie for supply
Competition for cattle continues to intensify between factories due to the scarcity of finished cattle and price has now become the determining factor as to which processor gets the available cattle.
In another week of heated trade, prices on offer for beef increased by 3 to 6 cent/kg (1p to 2p/lb), and the price clock is ticking quickly towards delivering 100p/lb, with 277 cents/kg (99p/lb) quoted this week for U grade cattle, and some reports of close to that being secured for mixes of good quality U and R grade cattle.
Across the south, most of the factories quoted 263 and back to 258 cents/kg (94p to 92p/lb) for stock this week. Most of them were paying more than that to get the cattle; how much more depended on their necessity to get more cattle, and on supplies in their area.
In the east of the country, Slaney Meats quoted 277 cents/kg (99p/lb) for U grade, with 268 and back to 257 cents/kg (96p to 92p/lb) for R and O grades.
Excel at Kilbeggan, and the company’s other plant at Newgrange Meats, Navan were also offering 268 and back to 257 cents/kg (96p to 92p/lb) for R and O grades, as was Donegal Meats, where 277 cents/kg (99p/lb) was on offer for U grade.
The last time that cattle prices touched these levels was 1996 and, since then, the spring finishers have experienced some very lean years. But those who stuck with winter finishing are reaping decent margins this year.
The effect of the change about in supply and price has however begun to show on the factories, with the decision of Fair Oak to cease slaughtering at their Clonmel facility, because of the difficulty in getting cattle.
A spokesperson for the company said that it is intended to resume slaughtering there in mid-August. In the meantime, the company will continue to process beef at their Bagenalstown, Co Carlow facility to supply their contracts.
The company is honouring in full all payments owing to suppliers of stock and other services to the plant at Clonmel.
There is a lot of speculation within the industry that Fair Oak may not be the only factory to find it necessary to follow this course of action over the next few months. A number of processors are trimming their operations and workers are now being laid off in the processing industry, as profit margins continue to tighten.
The exit of Clonmel has reduced the capacity for cull cows, which continue to be quoted at 218 cents/kg (78p/lb) at Dawn.
