The mystery of the missing slaughter premium

By Peter Young

The mystery of the missing slaughter premium was on the minds of farmers selling cattle this week. They are selling steers for the same price, this week last year but the slaughter premium was still to come. Factories don't appear interested in solving the puzzle. They are more focused on dropping quotes to 291c for R grades and 280c/kg for O grades. Some even went further breaking the 280c/kg to quote 277c/kg. It's a move that is bound to meet increased resistance especially when there are reports of up to 302/294c/kg still being paid for U/R grade steers and 294/286c/kg for loads of R/O grades. Heifers are tighter and according to the IFA up to 300c/kg was paid for good quality loads this week.

IFA National Livestock Committee Chairman John Bryan said the factories were finding it extremely difficult to buy cattle at their lower quoted prices. He said, "factories were using every trick in the book in their attempts to get prices down including misinformation through the factory agent network."

The Department factory sheets from last week show that prices did slip, but only by 1.5c/kg for steers and even less for heifers. Farmers are not giving in easily to the lower quotes although farmers in the Dawn scheme will be more tempted by the bonus which drops after the end of June.

Over 30 month

With 03 Jan. born steers now hitting over 30 months some plants have already tried on a 5.6c/kg cut. You would think that the threat of the BSE test was enough.

Bulls

The under 12 month market continues with up to 322c/kg paid while young bulls are making up to 305/300 for U/R grades. It's a different story for heavy bulls in Donegal where one farmer was forced to take 277c/kg, less than an O grade, for a heavy bull over 480kg carcase weight. After listing to the quality mantra of recent times he was certainly vexed.

ICSA beef committee chairman Robin Smith strongly criticized cuts by Donegal meat processors of 5.6c/kg on bulls over 440kg and a massive 16.8c/kg on young bulls over 480kg. "This is an extremely disappointing development given that Donegal meats have been to the forefront in promoting quality beef production. This move to cut the price of heavy E and U grade bulls sends out all the signals to producers," he added.

Refund cut

The cut in the EU export refunds to third country markets by a massive 20% forced some boats planned for the Lebanon to be abandoned. The Commission said it was to take the heat out of the EU beef price but was also based on budget concerns. On carcase beef it works out at 21c/kg but volumes being exported are low and factories doing the biggest trade have probably covered themselves for the next few weeks. The MII said the cuts reduce the competitiveness of EU beef against South American product and will have a negative impact in the autumn when volumes to third world countries increase. Even before the cut Brazil continues to increase their share of the Russian market, despite strict quotas. The MII and IFA were again in Brussels this week to push their joint policy on WTO and market access issues at the highest levels.

Cows

High numbers of cows continue to come out with over 8,000 slaughtered last week. The lowest quotes moved to 207/213/218 up the weights. Cow prices dropped by 6c/kg on average but it wasn't all negative. The Department sheets show that Eurofarm, AIBP Clones and Kepak Clonee all paid more for cows compared to the previous week. Eurofarm Duleek paid an average of 243c/kg for good quality cows.

The fall in price for cows hasn't been as great in the marts which could see some farmers selling there again.

Marts

After big falls in recent weeks there was a bounce in cattle price, probably linked to grass growth. Again quality got the lift while poorer grades stayed down. Talking to finishers, heavy bullocks bought for up to €1,100 a head in the spring, are dying in debt under current beef prices. With store prices still strong they will not be the only ones going that way this year, even if the missing slaughter premium was found.