Beef trade turns corner

By Peter Young

The beef trade has certainly turned the corner in the last week. Even processors are conceding that it has lifted off the bottom of recent weeks. Some soft sellers did still take 238c/kg (85) for R grades and 227c/kg (81) for O grades on Monday. After that 241/244c/kg (86/87) for O grades was on offer for farmers that were willing to hold tough. Even more was paid to get under 30 month cattle.

The tightening of under 30 month cattle that was emerging last week is starting to have a real impact. Factories like AIBP Nenagh who kill only 30 month were freely paying 246c/kg (88) for R grades. Other factories in the south had to raise their prices to compete.

Even at that some farmers with renewed confidence held out for more. The battle lines have definitely been redrawn with 252c/kg (90) now in some farmer sights. No doubt the factories will dig in especially as they are due to start killing for the lucrative Christmas orders in the next few weeks.

Good quality heifers are already above the 252c/kg mark. Slaney paid 258c/kg (92) for underage heifers this week and up to 263c/kg (94) has been given.

IFA Livestock Committee Chairman John Bryan said there is a severe scarcity of under age cattle at the factories and farmers are not willing to sell at the unviable lower quoted prices.

Cow prices have also rebounded this week. Some factories in the West are quoting 180/185/190 (64/66/68) up the weights, in the midlands 202/ 207/213c/kg (72/74/76) had to be given to get enough stock.

Weekly kill

Unable to get stock, factories are killing fewer cattle, with some predicting only 34,000 to 35,000 will be killed this week. That's 3,500 fewer that last were and a long way below the 40,000 mark usually being killed at this time of year.

UK

In the UK cattle prices have also increased by 2 - 3p/kg stg. (3-5c/kg) this week. The base price for R grades is now between 161-163p/kg but farmers supplying to specific contracts could be getting 170p to 175p/kg. Some say the move by processors to increase prices is more to do with the meeting they have being called to by the UK farming Minister Lord Bach than tightening supplies. The meeting with farmers, processors, retailer and caterers is to discuss the future of the beef industry. The fact that UK imports have mainly being sourced from Mato Grosso do Sul will be of particular concern

Marts

The lift in beef prices have brought renewed optimism in heavy cattle in the marts. Quality stores and weanling were up €20 to €30 a head. However plain cattle are still falling out of favour. They fell by €20 to €30 a head, creating an even wider gap for quality.

FMD in Brazil

The big news of the FMD outbreak in the Mato Grosso do Sul in Brazil spread like wildfire in the World Food Fair in Anuga, Germany.

This state with 25 million head is then second largest in Brazil and accounts for 42% of total Brazilian exports. It certainly put the Brazilian exporters who had spent €1m on stands in the show, on the back foot. IFA's John Dillon was quickly calling for a total ban on Brazilian beef at the show.

Russia was quickest off the mark. They imposed a ban on all cattle from the Mato Grosso do Sul state. The also are making neighbouring states sign a declaration that there was been no FMBD in the region in the last 24 months. Other countries such as Chile, Israel and Philippines were believed to have followed suit.

As we went to press the OIE were meeting to consider an EU ban. The likelihood was that they would impose a ban on Mato Grosso do Sul and Parana, a neighbouring state.

The impact

FMD hitting the headlines would make any farmer winch. At this stage it appears that the EU and Russian ban come into effect from late September/early October. This means that beef on the high seas will be allowed into Russia and the EU, reducing the impact in the short term. If the ban stays until this beef works through the system it will create increased demand, especially in Russia which has been dominated by Brazilian beef all year.

On the world stage if more countries ban Brazilian beef they will look to other countries for their beef reducing the overall supply. The longer the bans stay the more likely Irish farmers will benefit. Well they do say it's an ill wind that...