Factory Prices General thread

[Mf240]

The only thing about that is supply would drop if that happened, not many cracked enough to milk cows for no margin.

I'm not sure supply would drop , as there is too much concrete and shiny metal appeared on dairy farms over last 10yrs. Were there is big loans, farmers will milk to nearly as low as their variable costs are. Similar is happening in the beef game

I'm inclined to thing ozzy is right here. You'll have people running harder to stand still same as beef same as pigs , tillage ect. Trying to produce enough low margin product to make a living. The bigger farmers will try to get more cows milked by the same amount of staff. I hope I'm wrong.

 

[Ozzy Scott]

I'm inclined to thing ozzy is right here. You'll have people running harder to stand still same as beef same as pigs , tillage ect. Trying to produce enough low margin product to make a living. The bigger farmers will try to get more cows milked by the same amount of staff. I hope I'm wrong.

If I owe 500k and have 200ac rented long term, you have 100 grand hanging around your neck yearly, if you milk 1 cow or 250. You have to produce at all costs

 

[CavanJacks]

If I'm not mistaken base beef prices in factory hit €4.75 that year.grass cattle were great value too that spring with little silage and no grass anywhere to be had till June time.
Made money for sure that year with cattle.

 

[Mf240]

Got 477 flat for cattle that year but was disappointed with weights .

That spring there was even calves imported from the north for rearing.

 

[Peter]

I'm inclined to thing ozzy is right here. You'll have people running harder to stand still same as beef same as pigs , tillage ect. Trying to produce enough low margin product to make a living. The bigger farmers will try to get more cows milked by the same amount of staff. I hope I'm wrong.

Are you milking the same number of cows this year as you were in 2013?

 

[muckymanor]

The reduction in factory beef price is one problem, the increase in the mart buying price is another.

Has mart buying price gone up? It appears to have just not fallen in line with factory quotes? Suckler farmers have been selling weanlings at rock bottom for a long time. Certainly in this area, many dont sell as weanlings anymore. They are keeping less cows and either selling cattle as 18 month stores or else selling them within a few months of finishing. The low factory price has squeezed everyone so much so that the man in the middle of the chain is finding his position unsustainable.

 

[Mf240]

Are you milking the same number of cows this year as you were in 2013?

I'm milking about 20 or 30 more. But that will be that for me I'd say . Local lad going to milk 700 I'm told

 

[Peter]

I'm milking about 20 or 30 more. But that will be that for me I'd say . Local lad going to milk 700 I'm told

Would you not knock it out handier if you kept 25 less cows?

 

[Barrowsider]

Has mart buying price gone up? It appears to have just not fallen in line with factory quotes? Suckler farmers have been selling weanlings at rock bottom for a long time. Certainly in this area, many dont sell as weanlings anymore. They are keeping less cows and either selling cattle as 18 month stores or else selling them within a few months of finishing. The low factory price has squeezed everyone so much so that the man in the middle of the chain is finding his position unsustainable.

The price of continental weanling delivered here from the west fluctuated between 2011 and 2019 but the general trend was up. The bigger issue to the beef finisher is the increase in price of good store cattle (no doubt the reason why your neighbours have moved from selling weanlings to stores). The good store that cost €2.00-€2.10 here 8 years ago is now costing €2:30-€2:40 and that's a lot of money in a 550kg animal.
I have no interest in a futile suckler vs finisher debate, the fact remains both are at nothing at current prices and that's a pity. I am just glad we have gotten off that treadmill and no longer depend on the beef game to make our repayments.

 

[Mf240]

Would you not knock it out handier if you kept 25 less cows?

Dunno tbh probably a bit not an awful lot handier either . I'm not complaining about milking cows just saying that I cant see the price lasting

 

[muckymanor]

The price of continental weanling delivered here from the west fluctuated between 2011 and 2019 but the general trend was up. The bigger issue to the beef finisher is the increase in price of good store cattle (no doubt the reason why your neighbours have moved from selling weanlings to stores). The good store that cost €2.00-€2.10 here 8 years ago is now costing €2:30-€2:40 and that's a lot of money in a 550kg animal.
I have no interest in a futile suckler vs finisher debate, the fact remains both are at nothing at current prices and that's a pity. I am just glad we have gotten off that treadmill and no longer depend on the beef game to make our repayments.

Sold the best of stores here last spring at an average of €2.05. They were 520 to 580kg. Killed their comrades recently. All were U grade (In Fact I had picked the fancier ones to sell last spring because I hoped that they might catch a buyers eye) and came into €1450+ at €3.65 base price. Anyone that bought my bullocks at €1125 in March and slaughtered them 6 months later for €1450+ was making more than I had made out of them for the first 20 - 22 months of their life.

The problem is with the factory prices. The factories have both ends cornered. They are able to buy enough finished stock to control the market and able to build up stocks of lighter cattle in feedlots when prices are lower.

 

[Nashty]

Sold the best of stores here last spring at an average of €2.05. They were 520 to 580kg. Killed their comrades recently. All were U grade (In Fact I had picked the fancier ones to sell last spring because I hoped that they might catch a buyers eye) and came into €1450+ at €3.65 base price. Anyone that bought my bullocks at €1125 in March and slaughtered them 6 months later for €1450+ was making more than I had made out of them for the first 20 - 22 months of their life.

The problem is with the factory prices. The factories have both ends cornered. They are able to buy enough finished stock to control the market and able to build up stocks of lighter cattle in feedlots when prices are lower.

To be fair you were selling stores in Covid times back in the spring. They might have looked dear at the time to people but they were probably good value in hindsight.

 

[Nashty]

I spoke to a man at the weekend. Sold fancy but very light limousin heifers (March 2019) weighing 320kg on April 1st, got 800 euro for them, 2.50 per kg. At the time I thought twas lots for them, having seen them in the flesh.
Same man is now selling early spring heifer weanlings, has a batch of them 250kg sold for 750 euro. Very nice heifers again but light having seen them in the flesh. These would need to be vaccinated I would guess for pneumonia, haven't been introduced to meal etc so will melt this week after coming off the cows. Probably be closer to 230kg this day week after a week of bawling.
The heifers bought for 800 euro in the spring look cheap now in comparison!

 

[nashmach]

Sold the best of stores here last spring at an average of €2.05. They were 520 to 580kg. Killed their comrades recently. All were U grade (In Fact I had picked the fancier ones to sell last spring because I hoped that they might catch a buyers eye) and came into €1450+ at €3.65 base price. Anyone that bought my bullocks at €1125 in March and slaughtered them 6 months later for €1450+ was making more than I had made out of them for the first 20 - 22 months of their life.

The problem is with the factory prices. The factories have both ends cornered. They are able to buy enough finished stock to control the market and able to build up stocks of lighter cattle in feedlots when prices are lower.

Turnover is vanity, profit is sanity, a lot of that 300 euro "profit" will evaporate quickly when various costs are taken into account and as mentioned above, the likely direction of beef prices last March was downwards and seriously downwards at that.

 

[muckymanor]

Turnover is vanity, profit is sanity, a lot of that 300 euro "profit" will evaporate quickly when various costs are taken into account and as mentioned above, the likely direction of beef prices last March was downwards and seriously downwards at that.

But I can't control anyone's costs. If the buyer of my cattle didn't make profit from the €325 margin in 6 months on grass then its not my fault. There's loads of reasons why lads don't make profit and its usually not because it costs them more to keep an animal than someone else.

How much margin do you feel that people need in order to turn a profit?

Neither can anyone tell what beef prices will be like in 6 months time when the 550kg stores being bought now are being slaughtered. They could be on the up bigtime or the could be down at €3.40. But somebody obviously sees an opportunity to make profit from 550kg animals at today's live prices of €2.30 to €2.40.

 

[Barrowsider]

If the buyer of my cattle didn't make profit from the €325 margin in 6 months on grass then its not my fault.

What about the buyer that keeps them for 6 months on an indoor finishing diet? How much profit would he make? I suspect if you were depending on grass finishers only to buy your store cattle the demand, and consequently the price would be very much reduced.

 

[diesel power]

As a buyer of forward stores for feeding I can categorically state cattle are far to dear relative to factory price. However I can also state the importance of farmers like mucky who breed the good quality beasts and who need to be paid for that. A cow is an expensive animal to keep and as such the sucker farmer needs a fair price for their calves in order to make a living.
The problem for the finisher is the base price. I've long said it needs to be set at 4 Euro and then any extras like qa and better grading added on top. Instead we're told it's 3.60 but when you add in qa and a good grade sure aren't you getting a lot more then 3.60.

 

[Arthur]

As a buyer of forward stores for feeding I can categorically state cattle are far to dear relative to factory price. However I can also state the importance of farmers like mucky who breed the good quality beasts and who need to be paid for that. A cow is an expensive animal to keep and as such the sucker farmer needs a fair price for their calves in order to make a living.
The problem for the finisher is the base price. I've long said it needs to be set at 4 Euro and then any extras like qa and better grading added on top. Instead we're told it's 3.60 but when you add in qa and a good grade sure aren't you getting a lot more then 3.60.

That's it in a nutshell, if you go back to the sheet I posted off a base of 3.60 ended up with 3.78 admittedly dragged down by a heavily discounted Herefords grade.

 

[ithastopay]

@muckymanor
You sold your cattle last spring, that was the market on the day, what you got you got.
I remarked at the time it was a poor price for your type of cattle, normally you would be getting much higher prices per kg for the cattle you sell.

As you say you can’t control the costs and profitability, of the next farmer in the chain, that’s their business, whether they make money or lose money
If your not making enough money at sucklers why do you do it?
I’m not being smart it’s a very honest question.

I’ll ask if of myself as a finisher.
There are a few reasons,
We have land that’s not suitable for tillage, accommodation for cattle at home and on a rented farm that’s in tillage.
We are not going dairying.
We run a simple store to beef system, we like doing it, it’s a very tight margin game, we are making just enough money not to stop doing it.
We’d all like to have more out of it, that’s not going to happen, as long as we all keep doing what we are doing.
The problem is the supermarkets are taking a 30% margin on beef.

 

[diesel power]

That's it in a nutshell, if you go back to the sheet I posted off a base of 3.60 ended up with 3.78 admittedly dragged down by a heavily discounted Herefords grade.

It's hard to make a living at cattle at those prices. I can't understand why someone isn't questioning the huge disparity between Irish and UK prices. There's something very wrong at government level that they can't see anything rotten in the beef system. If was a loaf for example of bread and Tesco UK was 2 Euro cheaper then Tesco Irl there'd be war over it. The competition authority are beyond a joke.

 

[muckymanor]

@muckymanor
You sold your cattle last spring, that was the market on the day, what you got you got.
I remarked at the time it was a poor price for your type of cattle, normally you would be getting much higher prices per kg for the cattle you sell.

As you say you can’t control the costs and profitability, of the next farmer in the chain, that’s their business, whether they make money or lose money
If your not making enough money at sucklers why do you do it?
I’m not being smart it’s a very honest question.

I’ll ask if of myself as a finisher.
There are a few reasons,
We have land that’s not suitable for tillage, accommodation for cattle at home and on a rented farm that’s in tillage.
We are not going dairying.
We run a simple store to beef system, we like doing it, it’s a very tight margin game, we are making just enough money not to stop doing it.
We’d all like to have more out of it, that’s not going to happen, as long as we all keep doing what we are doing.
The problem is the supermarkets are taking a 30% margin on beef.

I didn't say that I'm not making money at sucklers. I haven't sold a weanling in a few years. My father has sold a few, but that's coming to an end too. The best weanlings (€280 - €3 per kg) are sold off for bull beef or for export ands the rest are kept and brought to a point where we can make some money on them. We have to change and adapt our system so that it gives a return. I don't mean offence to anybody, but several people have written a similar post on here this time last year and the year before saying that cattle were too dear. If they are too dear, why stay in that system? Fool me once, fool me twice, but 3 years in a row? It's time to start looking at some other enterprise. What I tried to point out to @Barrowsider was that he is not able buy cattle at as low of prices as other years because many suckler farmers aren't able to stay in business by selling weanlings at below the cost of production so are therefore keeping less cows and bringing cattle to either 18 months or within a few months of finishing and are finding that by doing this, they are able to make a small bit out of it.

You have to look at the age profile of suckler farmers too. Around here, many of the older men that had good hefty SFP's are gone from suckler farmers. The most asked question to my planner these days is "how many cattle to I have to keep to get my basic payments". There's younger people in suckler farming now. They can't afford to and won't sell at a loss unless the pressure is really piling up on them to get money in to meet a debt.

Yes, it plays right into the factory's hands because they can pick up cattle that can be finished quite quickly in a feedlot.

Yes, it squeezes out the middle man who traditionally bought weanlings or bought 18 month old store cattle and was able to turn a few pound at it.

But the problem isn't that farmers like Barrowsider have to pay too much for cattle, it's that they can't get enough from the factories for them.

I was happy with what I got for my cattle last March - it was unprecedented times. I was honestly happy that there was somebody to buy them on the day. I averaged €1125 for them on the day. They were 20 months old and grass fed. If I had sold them as weanlings 12 months previously, they would probably have averaged €700 a head. I felt that I broke even with them and times ahead were so uncertain, I was happy to have the money in my pocket which gave me some cushion to cover summer expenses.

I got an average of 10c more per KG in March 2019.

 

[muckymanor]

What about the buyer that keeps them for 6 months on an indoor finishing diet? How much profit would he make? I suspect if you were depending on grass finishers only to buy your store cattle the demand, and consequently the price would be very much reduced.

But that's my whole point. I can't control who buys them. It's an open market. In the mart, the highest bidder buys them. I have taken the risk of keeping the cow, breeding her and rearing the calf. The next man buys the risk and takes the chance. I can't choose if the buyer is a factory feed lot, or if its a farmer. I can't choose if the buyer will grass finish the animal or finish it indoors. That's decisions that they make and decisions that determine their profit. They are bidding around a ring. They can choose to buy or not to buy.

I simply gave you one of the reasons why the prices are higher, and even at that, they are nowhere where the need to be. People forget that to produce 20 animals for sale, the suckler farmer needs to ne keeping close on 50 head of cattle all year round when you count a stock bull, replacements and empties.

 

[Barrowsider]

But that's my whole point. I can't control who buys them. It's an open market. In the mart, the highest bidder buys them. I have taken the risk of keeping the cow, breeding her and rearing the calf. The next man buys the risk and takes the chance. I can't choose if the buyer is a factory feed lot, or if its a farmer. I can't choose if the buyer will grass finish the animal or finish it indoors. That's decisions that they make and decisions that determine their profit. They are bidding around a ring. They can choose to buy or not to buy.

I simply gave you one of the reasons why the prices are higher, and even at that, they are nowhere where the need to be. People forget that to produce 20 animals for sale, the suckler farmer needs to ne keeping close on 50 head of cattle all year round when you count a stock bull, replacements and empties.

All I'm saying is it's very important that everyone from the suckler farmer to the finisher makes a margin and I think you shouldn't be so dismissive of the man that buys your stock. Ultimately the profitability of the beef finisher determines the demand for store cattle and the demand for store cattle determines the price obtained by the man selling.
Within a 5 mile radius of here, four winter finishers that bought over 1500 store cattle in the local marts last Autumn have taken the decision to buy zero cattle this year. The man selling stores in our local marts will no doubt sell his cattle this year, but with reduced competition around the ring the price will be lower that it would be if those four finishers were still in the game.

 

[Mf240]

All I'm saying is it's very important that everyone from the suckler farmer to the finisher makes a margin and I think you shouldn't be so dismissive of the man that buys your stock. Ultimately the profitability of the beef finisher determines the demand for store cattle and the demand for store cattle determines the price obtained by the man selling.
Within a 5 mile radius of here, four winter finishers that bought over 1500 store cattle in the local marts last Autumn have taken the decision to buy zero cattle this year. The man selling stores in our local marts will no doubt sell his cattle this year, but with reduced competition around the ring the price will be lower that it would be if those four finishers were still in the game.

I bet you at least one or two if not all four will buy cattle.

I swore I'd feed no more cattle last year and yet here I am feeding a few again.

Lads would be afraid that this Is going to be the year and will be afraid that they'd miss out

 

[Mf240]

As a buyer of forward stores for feeding I can categorically state cattle are far to dear relative to factory price. However I can also state the importance of farmers like mucky who breed the good quality beasts and who need to be paid for that. A cow is an expensive animal to keep and as such the sucker farmer needs a fair price for their calves in order to make a living.
The problem for the finisher is the base price. I've long said it needs to be set at 4 Euro and then any extras like qa and better grading added on top. Instead we're told it's 3.60 but when you add in qa and a good grade sure aren't you getting a lot more then 3.60.

Think base price should be o grade and then that would leave u grade a nice bit over that.