€75 per head price cut in a month for some farmers

THERE has been further downward pressure on beef prices at the factories this week, and the supply of cattle continues to increase towards its autumn peak.

The factories have reduced prices by 3-6 cents/kg (1p-2p/lb), cutting base prices on offer for steers to 294-297 cents/kg (105p-106p/lb).

Heifers are worth on average 5-7 cents/kg more than the steers.

Several processors are paying 1-3 cents/kg over the base quotes for stock. On the downside, it is much more difficult to get any processor to pay for cattle off the QPS grid. With the intake heading for 35,000 head per week, the processors are in the driving seat, and prefer to pay according to the grid, which imposes heavy penalties or poorer grades and higher fat scores, this making these cattle cheaper for the processor.

The grid also includes a penalty of 6 cents on all stock over 30 months, which was always previously negotiable in farmers’ dealings with processors.

There is a price bonus of 6 cents/kg for quality assured cattle under the grid, but only about 15% of the kill is estimated to qualify for this, because the criteria acceptable to processors for the payment of this bonus are stricter than those applied by Bord Bia. For example, the bonus will not be paid for animals coming from a quality assured farm if they are sold through a mart – although these are quality assured animals as far as Bord Bia is concerned.

As a result, there is continuing criticism of IFA’s support for the QPS grid system from farmers. The third consecutive weekly reduction in the base price has also worsened the financial situation for cattle farmers. Base price reductions and QPS pricing have together knocked €75 per head off average cattle prices for some farmers in the past month. Meanwhile, they have seen a stable or strengthening cattle price trend over the same period in Britain. There, demand for beef has held steady during the seasonal switch from steak cuts towards roasting and forequarter cuts. According to Bord Bia, British cattle prices have advanced to Stg275.3 pence/kg for R4L grade steers, which converts to 352 cent/kg (126p/lb), including VAT. Irish farmers want to know why they get 58 cents/kg or almost €200 less for the average animal slaughtered, compared to Britain, which is the export destination for 44% of the beef produced in Ireland (2009).

In contrast to the prime beef price trend, the cow beef market was stable or slightly firmer this week. Quotes for O and P grades range from 228 to 252 cents/kg (81p-90p/lb), the higher prices being available for the heavier, better quality cows.


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