Last week, we reviewed the prices paid for store bullocks and heifers over the course of 2019 and compared the trade with the previous year and the previous five years.

This week is the second part of the MartWatch price review and we will examine the weanling trade.

Compared with the trade for store cattle, the weanling trade has been much more resilient to the price pressure seen in forward store cattle.

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However, the exception was the trade for heavy bull weanlings, which were met with the largest decreases in prices as a direct result of poor beef prices.

Heavy weanling bulls hit

Heavy bulls over 400kg were significantly back price-wise on last year.

Farmers in the autumn who specialised in selling heavy bulls to specialist finishers were worst affected by the drop in prices and saw sale prices run by up to €150/head behind the same time the previous year.

While heavy bulls were a difficult trade in the springtime, the major pressure occurred in August and September, coinciding with farmers bringing heavy 12-month-old autumn 2018-born bulls for sale.

At this stage, beef prices were running 40c/kg behind 2018 levels and this reduction in prices was entirely passed on to the primary producer in terms of lower prices paid for bulls in marts.

This, combined with new weight limits on finished cattle, may have a knock-on effect next year, as these weanling producers may move away from producing these heavy bulls.

Short of autumn peak

The peak price paid for weanlings occurred last September, when the average price paid for a weanling bull hit €2.33/kg or €816 for a 350kg bull, but prices fell by €80/head by early November.

By mid-December, prices were running at €2.20/kg once again for a 350kg bull or €770/head.

Strong exporter activity, combined with large numbers of high-quality types on offer in September, were the main drivers of weanling prices at the time.

Many mart managers have commented that the main single positive factor in the autumn weanling trade was the increased exporter activity. They have said that without exporter demand at the time, the weanling trade could have collapsed as a result of weak demand stemming from difficulties getting cattle slaughtered and the absence of farmers from the market place as a result of still having beef cattle on hand.

Weanling heifers peak

Exporter demand created increased competition for bulls in September. However, as heifers were not in demand from exporters, they relied solely on farmer demand and didn’t see the price peak that bulls saw in September.

Instead, heifer prices peaked in December at €2.20/kg, similar to bulls. Again, this was fully farmer driven at the time.

When compared with the previous year, weanling heifer prices were actually 5c/kg or €15 to €20/head stronger in December 2018 when compared with December 2019.

The spring trade saw the highest prices paid for weanlings for the year. Prices paid for weanling heifers peaked at €2.35/kg or €823/head for a 350kg heifer.

By the mid-summer, prices were running under €2.10/kg for the average 350kg heifer.

Average prices back €10 to €20/head in 2019

While 2019 proved to be a difficult year overall for beef farmers, the average price paid for weanling heifers and bulls was only back by €10 to €21/head in 2019 compared with 2018.

While this only marks a price decrease of 3c to 6c/kg, you have to bear in mind that this is an average for the year and does not show the extreme difficulties seen in the summer and autumn.

In terms of weanling bulls, analysis of prices shows that light bulls under 300kg saw prices fall by 5c/kg in 2019 compared with 2018, while the top third saw prices fall by 10c/kg.

Strong export demand for average-quality light bulls in the autumn actually helped the average price paid for the bottom third in terms of quality.

The average price paid for a 300kg to 400kg weanling bull was €2.24/kg in 2019, back 6c/kg on the average price paid in 2018.

If we look at the top third of weanling bulls, prices were back by 12c/kg on the previous year.

Heifers fared better than bulls. Light heifers from 200kg to 300kg saw prices run 5c/kg behind 2018 levels, while if we look at weanling heifers from 300kg to 400kg, the average price paid in 2019 was back by just 3c/kg or €10/head on the price paid in 2018.

The top third of heifers saw prices fall by 7c/kg in 2019, while the average price paid for plainer heifers increased by 10c to 13c/kg in 2019 when compared with 2018.

Price differential closes

In 2018, the difference between the top and bottom third of weanlings was around €1/kg.

In 2019, we have seen this differential close. A low beef price has led to reduced returns to farmers finishing cattle and in turn has led to farmers sourcing slightly lesser-quality stock in order to maintain cashflow.

This improved prices paid for lesser-quality types and led to lower prices paid for the top third of cattle.

For light weanling bulls from 200kg to 300kg, the differential was €1.01/kg, down 25c/kg on last year.

For weanling bulls, the differential was €0.84/kg, down by 25c/kg on 2018.

For heifers, it was €0.93/kg for light heifers under 300kg and €0.78/kg for heifers from 300kg to 400kg.

Prices below five-year average

When we compare the average price paid in 2019 to the average price paid over the past five years, then we can see that despite an ever-increasing cost base, the value of weanlings sold by farmers in 2019 was €38 to €41/head behind the average price paid in the last five years.

For heifers from 300kg to 400kg, the average price paid over the past five years was €2.33/kg, while in 2019 it was €2.21/kg.

A similar trend is evident for bulls. The average price paid for bulls over the last five years was €2.35/kg, but in 2019 the average was €38/head or 11c/kg behind this.