Bullocks or Telecom shares?

£100,000 invested in cattle, (a suckler herd), five years ago is worth about £70,000 today, such was the drop in cattle values. But the herd should have earned £75,000 leaving a net gain of £45,000.

Investing that £100,000 in the Irish Share Index companies would have left you with £250,000 worth of stocks today with and about £25,000 dividend income in the interim. Net gain: £170,000

Then again the stock market can fall, and cattle have gone through the BSE crisis in the interim. But these figures make you think. In five years time could we be looking at the same relativity between cattle and these ubiquitous BT shares.

Or would we be lonely without the four legged stock?

Selling cattle to buy BT shares hardly explains why so many underfinished cattle are being slaughtered this week. More likely the herdowners are short of fodder and are anxious to sell while the price is up a little.

While 88p a lb is being paid for the standard R/O grade bullock and up to 93/94 p a lb for the heavy U grades, the factories claim that the peak has been reached. As anticipated the spate of factories closing for hiolidays has done nothing for prices.

In particular cows are coming out in big numbers and this week's price of 69/70p a lb is under pressure.

On the other hand the news from EU supermarkets remains positive. On a visit to the UK last week, IFA's Raymond O' Malley found that all of the major multiples are again buying Irish beef. The task now is to close the 15% gap between the beef price in Ireland and the UK. The figures show that Britain will need to import 200,000 tonnes of beef in 1999.

The surest way to aggravate the UK producer is to sell in this beef at a discount. UK farmers are watching the Irish beef price with nearly as much interest as ourselves.

Killing for the Albert Heijn group continues at close to 1,000 head a week in the South in Slaney and Galtee, but the North has still to get going. This week Albert Heijn buyers were reported to have met the bosses in Kepak and Dawn. Dawn is set to take over the ICM plants from early July with no closure in between.

Dawn is set to keep the AFAB group, a factor which should help get a foothold with Albert Heijn. The Dutch multiple is looking for young continental bullocks.

Hopefully bigger inroads will made in the EU market in 1999. Figures in the Bord Bia Monitor show that in 1998 Irish beef exports to the EU grew by 21,000 tonnes and to Non EU outlets by 15,000 tonnes. We are still some way from regaining the share of the EU market that Ireland had in 1995.

Belgium

Belgian difficulties with domestic production and food continue. The Irish Department of Agriculture returned a Belgian Blue bull due to the Dioxan scare and also he had warbles.

The news from Spain is serious. Because of the domestic Spanish order to take out the spinal cord from all imported beef carcases from cattle of over 12 months of age, Irish exporters are being limited to calves and weanlings of under 6 months. No easy solution is in prospect. There's a lot riding on this issue.

Meanwhile, already this month Ireland has had 3 BSE cases with four more heads to be examined.

Task force

The most tangible item in the Beef Task Report issued by Joe Walsh is the promise to abolish the £3 a head SRM levy but this will be part replaced by a £1 a head beef promotion levy.

Raymond O' Malley expects these developments within three months.

The report also recommends a new price grid with the base price on O3 and a premium of 3p/lb for R3, 8p a lb for U3 but a discount of 5P/lb for all grade P's. The report was generally positive, but paid little attention to the absence of profits for finishing cattle in Ireland and the mushrooming demand for live cattle exports from Ireland.

70% WTO Limit used

Next week sees the end of another WTO (GATT) beef trading year. It looks as if the EU has used up only about 70% of its 1998/99 allowance and that about 300,000 tonnes can be carried into the new year July 99 to June '00.

This will be a major opportunity to reduce the EU Intervention stockpile as there can be no carryover into 2000/01 WTO year. But to move the stockpile the ex Intervention price may have to be fall further. This will not be good news for the likes of Ireland that is so dependant on Third Country outlets.

Bullocks

There was a steady trade in the marts this week. The number of cattle on sale was up, as was the number of buyers. Good quality store bullocks met a lively trade, but demand was poor for plainer light bullocks.

In Kilmallock, Friesian stores were making very poor money. Six bullocks averaging 345 kg made an average price of £112. In Enniscorthy this week, there was good demand for heavy bullocks. These sold for £20 under to £65 over the £1/kg. Prices for bullocks with one premium left varied from £20 under to £75 under the £1/kg.

In Mullingar, bullocks with one premium left sold for £50-110 over, with plainer lots selling at £10-40 over. Continental bullocks with all subs lifted sold at £40 under to £40 over the £1/kg. In Tullow, bullock prices were up £10 per head. Beef bullocks made £1 to £100 over £1/kg.

Heifers

The heifer trade remained steady this week. In Enniscorthy, there was a good trade for quality heifers. Plainer lots were harder to sell. The price for butchers' heifers ranged from £50 under to £40 over the £1/kg. Store heifers ranged from £70 under to £20 over the £1/kg.

Beef heifers made £220 under to £140 over the £1/kg in Tullow. In Mullingar, the heifer trade was steady. Prices for good quality heavy heifers were stronger, due to bigger numbers than last week.

Beef heifers made £30 under to £72 over the £1/kg in Athenry. Butcher heifers sold for £40 under to £15 over the £1/kg and store heifers made £100-110 under the £1/kg.

Calves