Factories on the back foot as strong demand sees beef prices breach €4/kg mark

Strong demand sees heifers up by 5-10c/kg and bullocks by 10-15c/kg in a week.

Martin Coughlan

April 12 2021 06:56 AM

Twelve months ago, the factory trade bottomed this week at €3.40/kg as the industry attempted to come to terms with the first of the international Covid lockdowns.

As of the start of this month, the overall kill for the first three months of this year stood at 394,200, not counting calves, that's back 54,377 on twelve months ago.

Kill figures over the last month have stayed around the thirty thousand per week mark and with demand eating supplies and pushing prices, the next few weeks should be interesting.

All of which went some way, in my head, to explain why one factory agent I spoke with at the weekend seemed more interested in rising mart prices for stores than his factories position on beef quotes.

Half the job of attempting to analyse the trade is trying to interpret what you're actually being told.

It's often the tone and direction the conversation takes that is sometimes far more revealing than the actual numbers you end up with "They'll blow their brains at the ring and then it'll be everybody's fault when it goes wrong in the autumn" was the general gist.

What about all those heavy cattle factories are currently buying at those same marts, who themselves appear well over the odds on price I enquired? "Hmm... We're on €3.85 for bullocks and €3.90 for heifers, maybe five cents more."

This man knew, as I knew, that the initial prices he had quoted me were out of date and even adding that extra 5c/kg still left him well short of the top of the market.

The best I've heard is €4/kg for both bullocks and heifers, which leaves heifers up by 5-10c/kg and bullocks by 10-15c/kg in a week.

It was the resignation in the voice of the factory agent that told me more than his price; that and the fact he was seeing the price of the cattle he has to buy for summer grazing getting further away the higher the factory price goes.

For those with continental cull cows, their prices appeared to harden also by 10c/kg last week, with R grades selling from €3.40-3.50/kg with an odd €3.55/kg. O grades are reported as averaging from €3.40/kg for the better type back to €3.30-3.35/kg for Friesian types. Better P grade Friesians are also reported stronger with €3.10-3.20/kg reported.

The factories' quest for volumes of meat saw stronger suppliers of U and R grade young bulls achieve a flat price of €4/kg last week. However, those with lesser numbers are still being quoted €3.85-3.95/kg for R's and U's. O grades continue to float around the €3.70/kg mark, watch them when you're doing the deal, make sure you've got a price set in advance as not everything we think should be ends up as an R.

As prices rise, my man from last week, who had been anxiously trying to secure a base of €3.80/kg for his six bullocks for three weeks but then discovered €3.85/kg was available, decided to hold to see how things played out got it right.

The latest report is he still has them but will no doubt be further encouraged by comments from IFA's Livestock chair, Brendan Golden who told me that €3.90/kg is now the "bottom for steers" with heifers operating off a minimum of €3.95/kg.