Feeders Strongly Resist Factory Price Pressure

IFA National Livestock Committee Chairman Michael Doran said factory agents were not succeeding in getting cattle at the lower quoted prices from the factories this week and have had to revert back up towards last week’s prices to get cattle. He said “with no prime cattle coming off grass, supplies are scarce and factories are reliant on cattle out of the sheds. Feeders are not prepared to sell cattle at the lower prices.

Michael Doran said despite quotes as low as €3.60/kg, agents have had to pay €3.66 to €3.70/kg to get steers and €3.70 – €3.80/kg for heifers. Bulls are making €3.65 – €3.75/kg. He said feeders are in a very strong position to resist the negative attempts from the factories on cattle prices.

The IFA livestock leader said the average R=3= reported Department of Agriculture price paid by the factories last week was €3.72/kg for steers, €3.79/kg heifers and €3.74/kg for young bulls. He said the Department reported that the factories paid an average of €3.12 for P+3 cows, €3.17 for O= cows and €3.32 for R= cows for week-ending May 29<sup>th</sup>.

Michael Doran said the factories were doing very well with the value of hides and the fifth quarter, which were worth over €100/head or 29c/kg. He said this is an exceptionally strong return for the meat plants.

The IFA livestock leader said all across Europe cattle supplies are tight and should remain so. The EU December 2010 census shows total livestock numbers down over 2.7m head or 1.7%. All groups of cattle numbers are down, with young animals less than 1 year down 0.9%, animals between 1 to 2 years of age down 1.8%  and animals over 2 years down 1.4%.

Michael Doran said Irish cattle supplies are forecast to be down 120,000 – 140,000 head for 2011 and with the kill back only 5.5% to date, numbers are going to be very scarce for the second half of the year. Likewise, a similar picture is developing for the UK with total cattle supplies forecast to be back over 100,000 head for the second half of the year.

Michael Doran said Europe has responded to the very strong international market for beef with EU exports almost doubled at 485,166t for 2010 compared to only 249,165t for 2009. “Exports to Russia, our largest EU export market were up 167%, while over 70,000t was exported to Turkey and 34,000t to the Lebanon.”

Michael Doran pointed out the major jump in the value of EU beef exports up from €615m in 2009 to €1.246bn in 2010. Exports to Turkey were worth an average of €3,575/t.

In addition, EU beef imports fell from 437,182t in 2009 to 378,954t in 2010 or 12.5%. Imports from Brazil, have fallen dramatically down from 344,000t in 2007 to 145,000t in 2010.

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