Revolt is probably too big a term to explain the current situation, but there is a definite change in farmer-factory relationships after last week’s price cuts.
Many farmers are choosing to hold on to cattle to see if the current blip in the market passes and this has forced some factories back to their own feedlots and feedlot finishers to maintain throughput.
Winter finishers are becoming increasingly frustrated with the latest cuts, leaving an already tight-margin business completely unprofitable.
This week's quotes
This week’s quotes are working off €3.70/kg for bullocks and €3.75/kg for heifers.
There was an effort being made in some factories to get bullocks to €3.65/kg, but they haven’t succeeded in doing so.
Some factories are managing to get heifers and bullocks bought at €3.70/kg, while others are still paying €3.80/kg for small numbers of top quality heifers.
Cows are also a similar trade to last week, with possibly a little less appetite for the poorer-quality cows.
P+3+ cows are moving around the €2.95/kg to €3/kg mark, with O grading cows moving at €3.05/kg to €3.10/kg.
R grading cows are moving at €3.20/kg to €3.30/kg, depending on quality and finish.
Bulls are working off €3.70/kg for R grading bulls, with €3.75/kg to €3.80/kg being paid for U grading bulls.
Under-16-month bulls are working off €3.70/kg to €3.75/kg base price.
There is a thought out there that this is a stunt being pulled by factories to fill feedlots with cheaper stores.
Store sales in the south have taken a hit this week, so, intended or not, it seems to be working.
Supplies of cattle are likely to be very tight for April and May and with no under-16-month bulls in the system to prop it up from May onwards, the factories see a pinch point coming there.
The problem was that up to now, with meal prices and store prices going up, there was little appetite to put cattle into feed.
The latest cuts will likely turn more of the smaller finishers and those without contracts away from the idea of purchasing cattle for finishing over the next few months, but for the bigger players, it will mean cheaper stores.
Meat Industry Ireland (MII) has stated that the current issues in the marketplace are down to a combination of factors, which include COVID-19 and Brexit, such as an overhang in the British retail market and a drop off in food service demand.
A number of industry sources expect the current impasse to be short-lived, with two to three weeks being mentioned.
The advice is to hold tight. It’s important to kill cattle when they are fit, but if you can hold on to get through the current few weeks, I’d hold.
Easter is another possibility for a surge in demand. With the current lockdowns likely to be still in place for much of spring, retail demand will be expected to lift again in advance of Easter, as consumers dine at home over the holiday period.
With Easter taking place early this year on Sunday 4 April, it means factories will be lining up supplies from early March, which is just two weeks away.
Sterling has also strengthened again in the last few days to 87p:€1, which adds further strength to the hands of Irish exporters.
Kill numbers have been dropping every week since the beginning of the new year, with the latest figures for the week ending 5 February 2021 showing a further decline in the weekly kill.
The kill for that week came in at 30,454. This is in stark contrast to the same week in 2020, where the kill was running at 36,385.
Across the water in the UK, the ADHB is reporting a drop of 3% in UK beef production for January when compared with January 2020 production or the equivalent of 76,400t less.
Northern Ireland throughput was down 3% also or 29,000 head.
The UK cattle kill is forecast to fall by 5% in 2021 due to tighter cattle availability.