The mart trade usually follows the factory trade. If factory quotes come back 10 c/kg, that usually means the mart trade for factory fit cattle comes back as well.

The heavy cattle trade is back this week, but not to the same extent that the factory trade is back.

A 10c/kg reduction in the factory would mean a 20c/kg liveweight correction in the mart, but this hasn’t happened this week and the biggest fall was seen in heavy bullocks at 10c/kg this week, with some of the heavy categories of stock back by as little as 4c/kg.

Factories have been sending mixed messages to farmers, with factory agents still paying big for factory-fit cattle this week and paying the equivalent of €8/kg for cattle in marts.

Heifer example

I saw a March 2023-born Aberdeen Angus heifer weighing 515kg make €2,070 in a mart last Friday.

The heifer was finished and would be an O= at best. At a 51% kill-out, the heifer comes in at 263kg carcase weight. At a base price of €7.40/kg, adding in the 20c/kg QA in-spec bonus for quality assurance and a further 20c/kg for a breed premium and take off 18c/kg for the grid deductions, that means the heifer comes in at €7.65/kg final price.

When you add in conservative figures for commission, transport and killing costs, the heifer is coming in at €2,150, so would need to be making €8.17/kg to break even. That means the buyer would stand to lose €137 on this heifer.

There isn’t a chance that the agent in question was going to lose €137 on the heifer, so that means factories are buying cattle in marts at the equivalent of €8/kg and over it.

It’s probably easier for them to source cattle at higher prices in marts where they can go relatively unnoticed in terms of buying activity. Printing €8.17/kg on a kill sheet is a different story.

Speaking to a few mart managers this week, there’s a lot of nervousness around the cattle trade for the back end and where it’s going to go.

There’s no worry about prices, with everybody predicting a bumper back end for weanling and store sales, but the money is starting to creep into conversations.

Cattle prices are up €600/head to €800/head in some cases in the last 12 months, so a mart selling 500 cattle a week are looking at an extra €400,000 in turnover in a week.

Some of the bigger marts could be looking an extra €1m a week when we get into the big autumn sales and they are saying they have to be very careful on credit.

Some are even changing purchasing policies to pay on the day, which could impact some customers’ buying power.

Martbids

Taking a look at this week’s Martbids analysis table, we see that all categories of stock eased a little this week.

Lighter weanling heifers saw the biggest correction this week, back between 20c and 30c/kg.

Weanling bulls continue to be a strong trade, with top-quality weanling bulls coming in at €5.73/kg this week, a similar trade to last week.