The forward store trade continues at a steady pace, with factory agents and NI customers competing for anything coming close to slaughter in the last few weeks.
Supplies of finished cattle are tight on the ground and this has forced factories to instruct agents to purchase in marts, even if the price is above what is being paid in factories.
This strategy has been very evident since marts resumed in January.
@farmersjournal in Carrigallen mart with #martbids. This fit April 2019 born @irishcharolais heifer weighed 655kg and sold for €1620. At over 30 months, if she killed out 55% which would be good, she’d need to be coming in to €4.60/kg + to get out. @FJBeef #buythemnomatter pic.twitter.com/f8G1W3NeJ4— Adam Woods (@ajwwoods) January 24, 2022
Take, for example, an April 2019-born Charolais heifer in Carrigallen on Monday night. She was fit for slaughter and weighed in at 655kg.
If that heifer was killed in a factory, she would probably come in at 360kg deadweight at 55% kill-out. The hammer dropped at €1,620, add in €20 for commission and another €10 to get her home, along with another €50 to get her killed and she’s standing €1,700 hanging up.
That means she needs a beef price of €4.72/kg to break even and you can bet your bottom dollar that the lads around the ring buying finished cattle generally do not do things to break even.
If you add in another €50 for a margin, that means she needs a beef price of €4.86 to get out. Yet factory quotes this week for over-30-month heifers are in or around €4.30/kg base price.
If you include the 8c/kg in-spec bonus (technically she shouldn’t get this, as she doesn’t have the required residency, but that clause only kicks in when cattle are plentiful) and add in another 6c for grading, you still only come up with €4.44/kg, some 42c/kg off the break-even price.
There was a €150 differential in that heifer between selling her in the mart and taking her to the factory.
@farmersjournal in Carrigallen with #martbids. This April 2019 born @irishcharolais cow/heifer (one calf registered) weighed 745kg selling for €1690 (€2.27/kg) @FJBeef Check out https://t.co/B58bv2SqtV for full sale report and photos. ?????? pic.twitter.com/0E5kPYeYl8— Adam Woods (@ajwwoods) January 24, 2022
Trade on the night was brisk for all types of stock, with slaughter-fit cows a particularly lively trade.
Good-quality suckler cows between 700kg and 900kg were hitting €1,800 to €2,000/head or between €2.20/kg and €2.40/kg.
In a similar story to the heifer above, cost would need to be coming close to €4.40/kg dead in the factory to make the equivalent of what they are making in the marts.
Forward heifers were also a very good trade, with up to €2.70/kg being paid for some top-quality 600kg+ continental heifers.
Plainer dairy-cross heifers were back at €2.15/kg to €2.25/kg, depending on weight and quality.
A number of spring 2020-born Aberdeen Angus heifers weighing around 500kg made €1,100 or €2.20/kg.