IFA National Livestock Chairman Henry Burns said cattle prices are rising rapidly as farmers dig in and demand price increases in line with the real market returns. He said farmers are not selling at the low quoted prices from the factories this week, supplies have tightened dramatically and prices have started to rise.
Henry Burns said buying for the important Christmas trade has already kicked in. Factories know supplies will be very tight over the next few weeks and are scrambling for cattle. The strongest price increases have come for heifers with plants paying from €4.10 to €4.40/kg for quality. Flat prices of €4.15/€4.20 for O and R grade heifers were paid this week. Steer prices have also started to rise with some plants offering farmers 10c to 20c/kg over current prices of €3.90/kg base to secure stocks in the coming weeks.
Henry Burns said bull prices are also rising with flat prices of €4.10/kg paid. The base has moved up 10c/kg and is rising fast. U grade bulls are making 6 to 10c/kg more in places.
A good indicator of the change in the trade is the improvement in the cow price. Top quality cows are making €3.60/3.90.
Henry Burns said the beef trade in the UK, our largest market, remains exceptionally strong with Bord Bia reporting R grade steer prices at the equivalent of €4.68/kg or €295 per head over Irish prices. He said the sheer strength of the British market and the large price gap with Irish prices show the massive potential for our cattle prices to continue rising. He added prime cattle supplies in the UK will remain exceptionally scarce with supermarkets and factories reliant on Irish supplies to meet demand. Sterling remains strong against the Euro adding up to30c/kg at current prices additional return compared to this time last year.
European markets are also very strong with R grade male cattle in Germany making €4.37/kg incl. 5.2% Vat and €4.21/kg in Italy, two of our important export markets. In France R grade males are making €4.18/kg.
Henry Burns said the resumption of the Live export trade to the Middle East and North Africa is essential to get some real price competition into the beef price and to secure an alternative market outlet. He said Minister Coveney has pledged to have the trade moving again in the next number of weeks, before Christmas and this is vital for the livestock sector.
The IFA Livestock leader said with feed cost rocketing this year, cattle prices need to rise substantially and stay rising into next year to provide a margin to winter finishers. He said Teagasc have calculated that cattle prices would need to increase to between €4.50 and €4.70/kg to give a return on winter finishing. These prices are in line with the current prices in our main market in the UK.