Price cuts of up to 6 cent/kg (2p/lb)

IT has been another difficult and very disappointing week for cattle farmers, with over-supply leading to a price slide at the factories.

Processors over-booked with cattle, relative to market demand, inflicted heavy price cuts, and put sellers on a waiting list to get their cattle in, as heavy bookings clogged a system already overloaded with high stocks of beef in the cold stores.

Farmers blamed the factories for taking advantage of a strong supply, with the steer supply having increased from 12,000 head to over 16,000 head per week in a few weeks. But the processors turned the blame on the market, citing difficulties in moving beef, and lower prices in most markets, except Northern Ireland and Britain, where returns are up 5 to 8%, compared to 2006.

The cuts fell heaviest this week on the O grade animals, on carcasses over 400 kg, and cattle aged over 30 months, with price penalties applied in each category.

Prices for R grade animals got away with the lightest impact, as quotes were reduced by only 3 cents/kg (1p/lb).

Across the south, R grade animals were quoted at 294 cents/kg (105p/lb). Prices were similar for the steers in the east, where 3 cents/kg more was on offer for heifers.

The factories in the midlands were offering 297 to 300 cents/kg (106p or 107p/lb). While it was more difficult to get any decent top-up on these quotes, producers were negotiating 3 cents/kg, but still taking at least 3 cents/kg (1p/lb) less than a week ago for under-age stock.

Prices for O grades were quoted at 280 to 289 cents/kg (100 to 10ep/lb), but the sting came in a price penalty of 6 cents/kg (2p/lb) on animals over 30 months, and limited interest in any carcass over 400 kg.

Cormac Healy, Meat Industry Ireland attributed the difficulties to a range of factors, including the dramatic fall-off in exports to Russia, higher cow slaughterings in the UK, and weakening prices on the Continent.

“In the first 15 weeks this year, the Irish beef trade to Russia has been decimated. Year-to-date, Irish exporters have contracted for only 1,200 tonnes of beef, compared to over 8,000 tonnes in the Spring of 2006. This represents an 85% reduction in trade, which has impacted on the market options open to processors, in particular for heavy cattle. The key reason for the drop in trade to Russia is the 50% reduction in export refund values imposed by the European Commission over the last two years”, he said.

Cow prices have eased by as much as 6 cents/kg (2p/lb) at the factories. It is still possible to get up to 252 cents/kg (90p/lb) for heavy O grade cows, and a possible 9 to 12 cent/kg more for a quality R grade cow.