The Irish Creamery Milk Suppliers Association (ICMSA) has criticised warnings from beef processors that prices will be dropped immediately after the Christmas trade.
The warning refers to a price correction or adjustment mode which will come into effect in the new year, which the ICMSA has described as “rubbish” and “scaremongering”.
This comes off the back of a recent increase in beef prices, which association livestock committee chair Michael O’Connell has welcomed.
“This is the usual attempt at manipulation and farmers just have to call their bluff and look through the scaremongering to the figures,” he said.
“The factories are looking at that situation and trying to work out how they can get away with controlling the price. Hence these silly and transparent warnings designed to prepare farmers for an attempt by the processors to drop price post-Christmas trade and into the new year.”
Beef price
Beef prices are up to 60c/kg better off than they were this time last year, which the ICMSA said is pointing towards less factory-fit cattle in the short term.
Pointing out that the increase in factory price has seen a simultaneous price rise in both forward store and finished cattle at mart level, O’Connell added that the return for these cattle seems higher in the mart than the factory.
“Your typical R grade steer, 700kg with a kill-out of 55% equating to a carcase weight of 385kg commanding a base price of €5.25c/kg while ticking all the boxes to get its QA bonus by being under 30 months, Quality Assured, 70-plus days in the herd, less than four movements, is making a grand total of €2,098,” he said.
“But the simple reality is that equivalent cattle are making €3.10/kg to €3.15/kg liveweight in the mart. To put it quite simply, that’s €72 to €107 per head more in the mart.”
Selling
The ICMSA has urged farmers to “sell hard” and not to take the first price offered, citing the mart as a “promising” option.
“We have seen 5c to 10c rises in cattle in the last fortnight and [the] ICMSA thinks that it’s not finished,” O’Connell said.
“Factory procurement staff have admitted to operating day to day and notably falling short of the daily kill plan requirement.
"Base prices of €5.25/kg to €5.30c/kg for steers and €5.30/kg to €5.35/kg for heifers have been paid this week, while flat-price[d] deals of up to €5.25/kg for Friesian steers, €5.70/kg for a mix of Hereford and Angus steers and heifers are being reported.”
Carcase weight
O’Connell added that steers and heifers have reduced a further 6kg in carcase weight versus the overall carcase weight last year.
He calculated that the decrease in carcase weight accounts for 5,950 tonnes of beef less slaughtered or available versus last year.
“Will the penny finally drop with processors regarding lighter carcases?” he said.
“Regardless of the extra cattle they may have killed year to date, there is a huge drop off in carcase weight, equating to a huge tonnage of beef which is not available for sale. The extra numbers killed are not offsetting the loss in carcase weight.”
Read more
Factories ‘failing to reflect’ strong beef export market - IFA
Aontú bill on below-cost selling of beef voted down in Dáil
Beef price update: better bite continues in trade
The Irish Creamery Milk Suppliers Association (ICMSA) has criticised warnings from beef processors that prices will be dropped immediately after the Christmas trade.
The warning refers to a price correction or adjustment mode which will come into effect in the new year, which the ICMSA has described as “rubbish” and “scaremongering”.
This comes off the back of a recent increase in beef prices, which association livestock committee chair Michael O’Connell has welcomed.
“This is the usual attempt at manipulation and farmers just have to call their bluff and look through the scaremongering to the figures,” he said.
“The factories are looking at that situation and trying to work out how they can get away with controlling the price. Hence these silly and transparent warnings designed to prepare farmers for an attempt by the processors to drop price post-Christmas trade and into the new year.”
Beef price
Beef prices are up to 60c/kg better off than they were this time last year, which the ICMSA said is pointing towards less factory-fit cattle in the short term.
Pointing out that the increase in factory price has seen a simultaneous price rise in both forward store and finished cattle at mart level, O’Connell added that the return for these cattle seems higher in the mart than the factory.
“Your typical R grade steer, 700kg with a kill-out of 55% equating to a carcase weight of 385kg commanding a base price of €5.25c/kg while ticking all the boxes to get its QA bonus by being under 30 months, Quality Assured, 70-plus days in the herd, less than four movements, is making a grand total of €2,098,” he said.
“But the simple reality is that equivalent cattle are making €3.10/kg to €3.15/kg liveweight in the mart. To put it quite simply, that’s €72 to €107 per head more in the mart.”
Selling
The ICMSA has urged farmers to “sell hard” and not to take the first price offered, citing the mart as a “promising” option.
“We have seen 5c to 10c rises in cattle in the last fortnight and [the] ICMSA thinks that it’s not finished,” O’Connell said.
“Factory procurement staff have admitted to operating day to day and notably falling short of the daily kill plan requirement.
"Base prices of €5.25/kg to €5.30c/kg for steers and €5.30/kg to €5.35/kg for heifers have been paid this week, while flat-price[d] deals of up to €5.25/kg for Friesian steers, €5.70/kg for a mix of Hereford and Angus steers and heifers are being reported.”
Carcase weight
O’Connell added that steers and heifers have reduced a further 6kg in carcase weight versus the overall carcase weight last year.
He calculated that the decrease in carcase weight accounts for 5,950 tonnes of beef less slaughtered or available versus last year.
“Will the penny finally drop with processors regarding lighter carcases?” he said.
“Regardless of the extra cattle they may have killed year to date, there is a huge drop off in carcase weight, equating to a huge tonnage of beef which is not available for sale. The extra numbers killed are not offsetting the loss in carcase weight.”
Read more
Factories ‘failing to reflect’ strong beef export market - IFA
Aontú bill on below-cost selling of beef voted down in Dáil
Beef price update: better bite continues in trade
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