Over the last three weeks top-end prices for bullocks and heifers have fallen by 10-15c/kg, leaving quotes yesterday for bullocks at €5.20/kg and heifers on €5.25/kg.
he rumour mill has gone up several gears as those on the ground try to figure out what’s going on.
There are two major factors that affect factory pricing: supply and market pricing. On the supply side Department figures show that in general factory intake has remained fairly consistent at 35-36,000 head a week.
That said, early info suggests that last week’s kill was around 34,000 — back 1,500 on the previous week.
What has kept supplies constant are the high fattening costs, with feeders reluctant to hold stock a day longer than absolutely necessary.
The widespread belief among farmers is that the factories’ price pull was an attempt to take some of the heat out of the mart trade, and thus make the restocking of feedlots more affordable.
If this had been the intention — and more than just factory feedlots would like to see the mart trade ease back — it hasn’t worked. Heavy bullocks and cull cows have eased somewhat but store bullocks from 400-600kg were stronger again last week.
The reality for the factories is that since the start of February, Irish prices for beef have become less competitive in both the UK and Europe.
Excluding vat, data from Bord Bia for the week ending February 11 shows the average Irish price for R3 steers to be €5.26/kg, compared to €5.27/kg in the North and €5.33/kg in Britain.
These prices might to some degree be manageable but that’s not case on the heifer side: average heifer prices here were €5.31/kg, with the North on €5.19/kg and Britain on €5.32/kg.
The situation in Europe is worse: we were 52c/kg below the EU composite average in early November (€4.32/kg versus €4.84/kg) but we reached parity with the EU average at €4.88/kg the first week of January. By the first week of February, the Irish figure €5.07/kg — 38c/kg ahead of the overall EU average of €4.69/kg.
When you look at prime beef — ie bullocks, heifers and young bulls — the story is worse. Since dipping to €4.47/kg (50c/kg below the EU average) in early November last year, Irish prices have risen steadily.
By February 18, they stood at €5.24/kg — 78c/kg above the overall EU average of €4.46/kg. Overall average EU prices have fallen by 58c/kg since the start of the year.
It’s my belief that this fall in EU prices for prime beef is the major driver in the factories’ attempts to balance their books by cutting prices to Irish farmers.
Yes the UK market is our major outlet but the EU is also vital, and the bigger worry has to be that average prices in Europe have headed sharply south.
