Phelim O’Neill and Adam Woods this week outline the prices paid for stock by factories around the country in 2022. The price gap for different classes of stock is as big as the profit per head many farmers are left with.
What can we learn from this? It essentially informs farmers of the best-paying factories for different classes of stock.
If you have O grade steers, Dawn factories averaged the highest at €4.91/kg, but the range was from €5.11/kg to €4.74/kg. In the same way for top-quality U grade bullocks ABP came out on top, averaging €5.17/kg compare to Dawn next best at €5.12/kg.
Farmers must use the information to look at the track record of the factory paying best for the type of cattle they have. They can then calculate the costs of transport and other associated costs of getting the cattle to that factory relative to other options.
What is not captured in the price leagues is the price paid for finished cattle around the mart ring. More and more farmers finishing relatively small numbers of cattle seem to be getting on better around the mart ring than with an agent viewing and quoting for finished cattle in a shed.
Adam Woods tells me there were almost twice as many cows slaughtered in 2022 compared to 2019 that were purchased in a mart and slaughtered within 30 days (123,000 v 63,000).
More and more factories seem to be prepared to pay more around the mart ring for a select and smaller number of cattle rather than lift the base price across the board. There is, of course, nothing wrong with this. However, for many farmers the traditional thinking has been if they are fleshed and finished they should go direct to the factory. Times are changing.
Factories have more power through consolidation and partnerships with bigger feedlot type operations. Maybe online bidding has provided a mart lifeline for smaller operators to get a better price for finished cattle in marts?
The highlight from the minister’s speech at the IFA AGM has to be the strong words of commitment shown to genotype the national cattle herd.
We have to acknowledge that some suckler and dairy farmers are already well down this road. Positive action by the stakeholders will be closely watched from now. How this global first can be funded initially to get it off the ground, and the ongoing cost and benefits to farmers, also need to be crystallised to build on this positive momentum.
The minister also cleared up the timelines around the year, 2022, that would be used should the proposed compensation for a dairy reduction or exit scheme get the green light. This goes some way to giving more information to dairy farmers. However, until the details are sorted out, it’s probably not enough for any dairy farmer to act on if they were already considering selling or reducing stock numbers. They’ll sit and wait if they can.
At each of our CAP roadshows, suckler farmers have voiced concern at the obligation to join the Bord Bia audit scheme to avail of the new CAP suckler cow premium.
They strongly suggest the market benefit they get as weanling producers means they incur cost, but little return from being involved.
The more intensive and complete auditing that has been talked about for a long time won’t encourage them to be any more amenable to an audit, especially if there is no additional market premium.
There is another cohort of farmers who feel the current Origin Green audit fails to deliver enough metrics and real verification of the environmental benefits that farming brings, rather than just highlight the emissions from the farm. We await the detail.