Martin Coughlan: Farmers the losers in beef numbers game
The factory trade continues to be difficult with the numbers game remaining the main stumbling block. Last week’s overall factory kill was 35,828, up significantly on the 32,974 from the same week last year.
There is a little bit of the effect of a snowball rolling down a hill about the factory trade at present. Every week the story is the same – strong numbers, usually several thousand above a previous year’s equivalent, and every week a few extra men look at their cattle, weigh up the costs, look into the future of their enterprise, and probably decide to move their stock ahead of time before the roof comes tumbling in – thus adding to the supply snowball.
Prices for bullocks and heifers remained fixed yet again yesterday at €3.75/kg and €3.85/kg respectively. The situation on the bull side is that a bull of 5c/kg last week was made to stick in some places and yesterday morning rumours began circulating that 5c/kg could easily be turned into 10c/kg as this week goes on.
Should that happen, you could see a price range for bulls within grades from one factory to the next of 10c/kg. As it stands reports indicate that quotes as low as €3.70/kg for U grades have been mentioned, but with €3.80/kg paid last week, €3.75/kg appears to be the general run. It is to be hoped that the price slide, if not stopped, has at least slowed.
The range for R grade bulls appears to be €3.60-3.70/kg, with a majority seeing €3.65/kg. O grades and Friesians continue on €3.50/kg. The mental pressure on those trying to make a living in the bull game at present is immense.
Cow prices also remain pressurised with talk of further price cuts in the pipeline. For the present, though, your R grade cow will get you up to €3/kg but some are being forced onto €2.90/kg. O grades are on €2.70-2.80/kg, with better P grades making €2.50-2.65/kg.
On the good news front, the Department announced yesterday that it had concluded an agreement with Veterinary Ireland for the delivery of new arrangements in relation to meat inspection. This proposed agreement will be balloted on no later than February 1, with Veterinary Ireland recommending acceptance.
Statements issued by both the IFA and ICSA last week offered little in the way of comfort for those travelling the hard road that is winter finishing at present, but I feel both are deploying the wrong tactic when warning of a potential collapse in the beef industry here if there is a hard Brexit.
Maybe I’m totally wrong but telling the British supermarkets we are terrified of losing their custom at this point when we have no idea how the Brexit endgame will play out dramatically weakens our trading position.
Irish beef finishers are under severe pressure not because of Brexit, but because of years of accumulated losses coupled with chronically high production costs.