FARMING INDEPENDENT -15 February, 2016
A surge in the supply of young bulls to the processors has resulted in a drop of up to €80/hd in recent weeks.
Weekly intake at the factories is now exceeding 6,250/hd and producers are expressing concerns that a repeat of the collapse of 2014 may be on the way for finishers of bull beef.
Joe Burke, Bord Bia said that the price gap between bulls over 16 months of age was accentuates because the younger animals qualify for the QPS bonus.
“At times when young bull and steer supplies are high, demand for older animals at meat plants can be difficult, because beef from over-16 month old bulls is not eligible for our UK retail customers,” he said.
He added that low grain prices and increasing volumes of cull cow beef on the market is keeping European young bull producer prices low.
“In contrast to Irish steer beef, young bull beef on Continental markets is often looked upon by customers as more of a commodity,” he said.
ICSA president Paddy Kent said farmers are being encouraged to produce more, despite weakened markets.
“Unless there is a market to give a reasonable return, finishers are heading for another major problem.
“It has happened in milk and we cannot allow beef to follow the same route of returns falling below the cost of production,” he said.
The average R3 young bull price has moved from being 1c/kg higher than the comparable grade steer to 16c/kg less since late autumn, with the weekly intake increasing from 2,100/hd to 6,257/hd.
The supply for the first five weeks of 2016 has been equal to almost 20pc of the total supply of young bulls to the factories for 2015, with a week-on-week increase in the supply since the beginning of the year.
Michael Guinan said many farmers had decided to finish bulls in an attempt to avoid the expected increase in supply in the second half of this year.
Mr Kent has called on Bord Bia to redouble their input on promotion of beef.
“There is no point in urging farmers to produce unless there is a market and a return that leaves a profit margin.
“Beef farmers are paying a levy to Bord Bia and they are entitled to expect return for it,” he said.
Average carcase weights are also showing a big increase compared to 2014.
The average for U grade young bulls is currently at 468kg compared to 426kg for the same week last year.
Some producers of heavier carcases have also been penalised in recent weeks as weight limits have been reintroduced since the last Beef Forum was held in December.
Meat Industry Ireland said the moratorium that had been in place for 14 months on heavy cattle had come to an end.
It confirmed processors were adopting their own approach in relation to heavier cattle.