Beef prices at the factories commenced the New Year with little change from the closing days of the old year — but the first signs of some tightening in the supply of cattle emerged.
Meanwhile, demand for beef remains strong.
The base price for steers is being quoted at 395-400 cents/kg. Processors in the southern counties are generally trying to get their requirements as close as possible to 395 cents/kg, while 4/kg is more the general run of the “up country” trade.
Heifer prices are generally at a premium of 10 cents/kg over steer prices, and some suppliers are reporting deals delivering up to 415 cents/kg, at the upper end of the trade.
Cow prices have also opened slightly stronger in 2015.
The base for O/P-grade cows is being quoted at 310-340 cents/kg, and there’s up to 360 cents/kg for the quality R-grade cows.
Intake at the factories last week was just under 23,300 head, which was around 2,300 head less than the opening week in 2014.
After a very strong finish to the 2014 supply pattern, some easing in the availability of cattle appears to be inevitable, but it will take a few weeks to determine where the supply pattern will settle.
The composition of last week’s supply showed steers holding up, at 8,300, heifers at around 7,000 head, with 4,000 cows and around 3,800 young bulls in the mix.
Statistical analysis indicates that the supply of finished cattle in 2015 should fall by about 150,000 head, compared to 2014, reducing the average weekly kill closer to 30,000 head. There has also been a steady build up of live exports of finished cattle to Northern Ireland, with just over 40,100 of the 57,438 finished animals exported live in 2014 going north, attracted by stronger prices across the border.
The first commitment by beef processors at the Beef Forum agreement chaired by Agriculture Minister Simon Coveney came into effect on New Year’s Day, with the introduction of a payment of €3 per head on out-of-spec animals from Quality Assurance approved farms, aged less than 36 months, which do not already achieve the 12c/kg in-spec bonus.
Processors propose that the QA bonus be increased from €3 to €5 per steer or heifer, in return for restoration of QPS fat adjustments (fat score 4=/+), which were agreed in 2010.
The €5 QA bonus and restoration of fat adjustments will be discussed at the Beef Forum meeting at the end of this month.
Farmers reacted angrily to the announcement of the €3 payment (less than 1 cent/kg) for out-of-spec animals from QA farms.
Meanwhile, farmers have welcomed the full access to the US beef market for Irish beef. US beef prices are up to 25% higher than the EU average.
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