Factories continue to hold the upper hand in the beef trade this week, with quotes still stuck in gear.
Factories have navigated the annual tightness in supplies for April and May to precision. Many are operating at half capacity or less and are managing their way through the reduced supplies.
Some are going to great lengths to put some fear into the market, delaying cattle by seven to 10 days in some cases.
Factories are also concentrating on killing contracted cattle at the moment. This is on the back of a kill of just over 31,000 head of cattle - over 5,000 head back on the same week in 2022.
Irish beef quotes are once again at the bottom of Europe when it comes to R3 bullock and young bull prices.
Taking a look at beef prices around Europe, the Irish R3 bullock price was at €5.58/kg for the last week of April 2023.
For that same week, the British price for R3 bullocks was at the equivalent of €5.91/kg, while the French price came in at €5.64/kg for R3 young bulls. The Italian R3 bull price came in at €5.49/kg for the same week.
It looks like winter finishing will be left to factory feedlots
Factories continue to try to buy bullocks at €5.20/kg this week, with bigger suppliers and regular customers on €5.25/kg.
Heifers are working off a €5.25/kg base quote, with €5.30/kg going to some of the bigger operators. This is the base quote before any breed bonuses or loyalty scheme payments are applied, which could be as high as 50c/kg in some instances.
In a brave move, some factories have even tried to pull quotes back by 5c to 10c/kg this week. However, this is being met with stiff opposition on the finisher side and it is back to the same story of quoting one price but paying another one when push comes to shove.
The negativity in the trade, which is stemming from Irish plants, is doing serious damage to winter finisher confidence, with more farmers saying this will be their last year finishing cattle during the winter months.
It looks like winter finishing will be left to factory feedlots, with farmer finishers concentrating on a grass-based finish.
Altering the supply curve to big numbers in autumn where factories need an all-round supply could have repercussions for seasonal supply and pricing in the back end.
The young bull trade remains steady.
U grading bulls range from €5.40/kg to €5.50/kg, with R grades 10c/kg back at €5.30/kg to €5.40/kg.
P and O grades are moving in the main from €5.00/kg to €5.10/kg and €5.10/kg to €5.20/kg respectively.
Under-16-month bulls are being quoted from €5.20/kg to €5.25/kg on the grid, excluding the QA bonus of 12c/kg.
U grading cows are trading anywhere from €5.00/kg to €5.10/kg, with plants most active for top-quality cows continuing to show a keen appetite for the right stock.
Ashbourne Meats in Roscrea is paying €5.30/kg for U-grading pedigree Limousin cows, provided they are presented with a pedigree Limousin cert on the day of slaughter.
R grading cows are trading from €4.80/kg to €4.90/kg, with young cows a super trade in the live ring.
O grading cows are at €4.60/kg to €4.70/kg, with P grading cows coming in at €4.40/kg to €4.50/kg.
'Demand for beef is strong' - IFA
Irish Farmers' Association (IFA) livestock chair Brendan Golden said: “The most expensive cattle are those produced by winter finishers. Prices have moved up just 24c/kg since the beginning of the year.
"This is against a background of steady and consistent beef price increases in our key market - the UK - where prices have increased by over 50c/kg over the same period.
"Demand for beef is strong in the UK market, with spend up 9% on beef in the past three months and volumes down only marginally by 1.7%,” he said.
"Demand will increase over the coming weeks and with supplies of finished cattle tightening, price increases must be on the table.”