Excellent demand for cattle over the Christmas break saw many factories ease the purse strings in an attempt to maximise throughput.
This is reflected in last week’s three-day kill reaching 19,519 head, significantly higher than the corresponding week in previous years.
Specialised finishers and those handling higher numbers benefitted most, extracting a 5c/kg to 10c/kg premium over the general prices paid of a base of €3.75/kg for steers and €3.85/kg for heifers.
Factories are this week trying to bring prices back in line with these base quotes, but are being hampered in their efforts by supplies remaining tight.
Factories report many plants being short of cattle so far this week. This gives the impression that the kill may be well down on pre-Christmas levels, but this may not be the case.
The tightness is stemming from factories working in a market with high demand and, with beef reserves low, pressure is on to maximise throughput.
As such, specialised finishers or those handling high number of heifers and steers ticking all the boxes on specifications are continuing to secure a base of €3.80/kg and €3.90/kg respectively, with sellers handling lower numbers 5c/kg lower.
Deals continue to be secured on what factories previously deemed out-of-spec stock. Allowances have been made in cases for cattle killing at fat cover of 2= or 4+ with carcase weight and age limits also eased over the Christmas break.
The VAT rate addition for unregistered farmers has increased from 5.2% to 5.4% since 1 January.
Cows brisk
The cow trade has moved on, with supplies also reported as tight, with a significant percentage of cow throughput now coming from specialised finishers.
With greater selling power, a wider differential has opened between these sellers and farmers handling a handful of cows. P+3 grading cows are selling anywhere from €2.85/kg to €3.05/kg, with fleshed O grading cows from €3.05/kg to €3.20/kg.
Demand has also strengthened for good-quality fleshed R and U grading cows. R grades are selling from €3.20/kg to €3.35/kg, with U grades to €3.45/kg to €3.50/kg at the top of the market for young, well-fleshed cows.
A similar situation is evident in the bull trade, with last week’s young bull kill of 3,546 matching the increasing percentage of the kill handled in previous weeks. R grade bulls are selling from €3.75/kg all the way to €3.90/kg, with U grades from €3.85/kg to €3.95/kg.
Carcase weight limits were also eased in some plants over the Christmas period, with agents being told to pull weights back in line this week.
Friesian bulls are selling in general from €3.55/kg to €3.65/kg, with large lots of O=/+ grading bulls selling to €3.70/kg.
Bulls less than 16 months and trading on the grid are selling on a base of €3.75/kg in the main. This excludes the 12c/kg QPS bonus for stock meeting the required criteria.
Strong NI trade
The northern trade is also being driven by tight supplies. Base U3- steer and heifer quotes are unchanged, ranging from £3.44/kg to £3.48/kg (equivalent €4.27/kg to €4.32/kg incl VAT), but sellers are easily securing 2p/kg to 4p/kg higher. Regular sellers are securing 5p/kg to 8p/kg higher, with sellers with supply agreements working closely with plants securing into the high £3.50s.
2016 beef kill reaches 1.64m head
€250 price difference between Irish and British steers
What beef price is needed to deliver €200 a cow in a suckler finishing system?