beef price tracker

wrangler

Fireside Solicitor wrote: »

I think the Journals analysis is a bit high level. He takes two published accounts and uses their public margin to estimate the 5 big boys.

In the published accounts the operating profit is AFTER all sorts of accounting gimmicks like Directors costs, management charges and tax management recharges (profit shifting), the only element of these you can see are Directors costs from the published accounts, the rest can be legitimately buried in the various cost lines in the accounts. Do you honestly think these two companies would release true margins - no different to 99% of other large private companies they try to suppress profit disclosure for various reasons.

The point they make about interest costs is interesting. Meat processing companies have phenomenal cash flow so they tend to borrow a lot of debt and use that debt to ultimately pay their shareholders lots of €. The beaut is that the interest cost is fully tax deductible. You don’t think Larry G has hired an army of big guns from KPMG for the good of his health?

No different than any business so,
As the powers that be are wasting our tax money, it's our duty to save them from themselves and stick it in our back pocket as much as possible.
Fair dues to anyne that does it if it's as easy as you make out

blue5000

Anybody got quotes for next week?

patsy_mccabe

So €32 per head is the factory operating profit per head. Come on. No way is it that tight.

Bass Reeves

patsy_mccabe wrote: »

So €32 per head is the factory operating profit per head. Come on. No way is it that tight.

Read the article cost of processing is 321/head seems a bit high. 1.75 million cattle slaughtered. Average price/kg to farmers was 3.53, this would have been across cows, bulls and prime cattle. Take vat off it give an average price 3.35/kg 🀀. It a lazy journalism article but again it is in the FJ so what do you expect. No analysis. If the margin was that tight there would be wholesale processors going out of business.

Only way margin could be that tight us if retailers were giving a guaranteed margin over costs with retailers controlling demand

Willfarman

It is indeed lazy journalism that certainly will draw no criticism from meat industry Ireland.

wrangler

Willfarman wrote: »

It is indeed lazy journalism that certainly will draw no criticism from meat industry Ireland.

i can't see that it's anyones business, no more than the profit monitor, plenty on here in companies and their profit can be checked out.....how many would be bothered doing that.....and why

kk.man

patsy_mccabe wrote: »

So €32 per head is the factory operating profit per head. Come on. No way is it that tight.

The big three probably have a margin closer to 50e but an independent processeor is on very tight return. If any of the big three look for product off him they really push his margin to the cost of production.
Yes all big plants rarely use cash flow to keep the thing floating. They have big o d as it makes financial sense.
I wouldn't be surprised if retailers were dictating the price. Just look at supermarkets adds for 30% off meat. A week later cattle prices are pulled. I have observed this happen for a few years now.

wrangler

kk.man wrote: »

The big three probably have a margin closer to 50e but an independent processeor is on very tight return. If any of the big three look for product off him they really push his margin to the cost of production.
Yes all big plants rarely use cash flow to keep the thing floating. They have big o d as it makes financial sense.
I wouldn't be surprised if retailers were dictating the price. Just look at supermarkets adds for 30% off meat. A week later cattle prices are pulled. I have observed this happen for a few years now.

It's common knowledge that the processors are screwed down on price if there's promotion coming up, particularily noticed in the lambs, promotions seem to accelerate the drop in price rather than the expected affect

patsy_mccabe

Anyone here have their head around how the beef factories interact with the large retailers and other large outlets. Would there be fixed price contracts over a few months? This is how I imagine it to be and then the factories up/down prices to farmers to control the flow of cattle arriving at it's gates. After all beef is sold 365 days to the public with almost constant demand .

blue5000

patsy_mccabe wrote: »

Anyone here have their head around how the beef factories interact with the large retailers and other large outlets. Would there be fixed price contractracts over a few months? This is how I imagine it to be and then the factories up/down prices to farmers to control the flow of cattle arriving at it's gates. Afterall beef is sold 365 days to the public with almost constant demand .

I don't think there is constant demand, I'd say it's very seasonal with peaks and troughs like every other market. Think about school holidays for example, when they start I reckon there is a % drop for catering beef, likewise a lift after the holidays. Christmas party season compared to January, and while we're on about religious festivals look at Ramadan and everybody swinging to lamb at Easter.

Then if we have a good summer, and England in the world cup, lots of barbies will be lit with a corresponding lift in steak and burger demand.

I think it's more a question of an almost constant weekly supply with a fluctuating demand.

patsy_mccabe

'Prime Beef throughput' at Irish Beef plants for the full year 2017. Values are weekly kills.
Source Bord Bia.
Almost a constant weekly throughput.

blue5000

Thanks patsy, all we need now is a graph for 2018 so we can see where the (meal) troughs are, pun intended.:D

kk.man

Years ago supermarkets didn't care about the cost of fresh meat. They just simply saw it as a lost leader.They had their own butchers who cut up the carcauss. Factories had a good margin. Noadays margins are squeezed and it would be very hard for a new meat plant to start from the bottom. The product is now cut up and put in packs in the factories now.

Hershall

blue5000 wrote: »

Anybody got quotes for next week?

3.90 for bks mext week midlands but just about.......

Cavanjack

Was talking to the young lad of a small meat processor one night. He had a good few drinks in him so we talked shop for a while. He said they were making a profit of €200 a head. Think they were just slaughtering and selling primal cuts (if that's the right expression). He said the bigger lads would be making more.
The journal is turning into a rag with their sensational headlines.

kk.man

Cavanjack wrote: »

Was talking to the young lad of a small meat processor one night. He had a good few drinks in him so we talked shop for a while. He said they were making a profit of €200 a head. Think they were just slaughtering and selling primal cuts (if that's the right expression). He said the bigger lads would be making more.
The journal is turning into a rag with their sensational headlines.

Think he had too much drink on him...

Mac Taylor

In a prior life I had a lot of dealings with uk retailers, even on promotion they expect their margin to be maintained, contracts were usually 1-2 years and would have promotions built in to the price. Account manager would base his price on a combination of standard and promotional sales, later especialy with own label products they wanted open book costing, basically a fixed margin on cost. This was ~15 years ago and related primarily to frozen food so may not be relevant any more:P

wrangler

kk.man wrote: »

Think he had too much drink on him...

Aye, Pubtalk, very dependable source alright

Cavanjack

wrangler wrote: »

Aye, Pubtalk, very dependable source alright

It's often the place to hear things You shouldn't hear.

Bass Reeves

My opinion on the article is that it was a way to have a fancy headline on the front page and fill 2-3 pages inside of rubbish.They gave a figure of 2.1 billion paid to farmers for 1.75 million cattle. That is 1200/animal. No mention of the vat rebate. Very few finishers are vat registered and those that are usually have the finishing unit a a vat structure if possible. Vat accounts for 60 euro or about 100 million of the figures supplied by the papers.

He looked at Foyle Meats margin at one stage this was 83 euro/head which equated to less than a 2% margin(1.6-1.9%). Across the rest of the industry this equated to only 32 euro/head. From this Foyle must be killing elephants if 83 euro of a margin transfers into only a 1.6-1.9% margin/head. Average animal is making them a gross return of 4600 and if you take away there average processing costs and margin they are paying farmers over 4K/head for cattle. Next we will have the elephant meat scandal.

At the end he add a note that operating profits dose not take into account cost of interest on debts additional income or taxes. He made no analysis of what way SRM removal effects operating costs. Goodman is one of only two owners of SRM processing plants. What he charges other independent plants and knackerys would effect profitability right across the industry.

Then on page three we have a big picture of Justin and Joe holding a sign for save our sucklers. It would be more apt if they has a sign say save the suckers. Because the FJ is not helping beef farmers with its lazy journalism.

wrangler

Bass Reeves wrote: »

My opinion on the article is that it was a way to have a fancy headline on the front page and fill 2-3 pages inside of rubbish.They gave a figure of 2.1 billion paid to farmers for 1.75 million cattle. That is 1200/animal. No mention of the vat rebate. Very few finishers are vat registered and those that are usually have the finishing unit a a vat structure if possible. Vat accounts for 60 euro or about 100 million of the figures supplied by the papers.

He looked at Foyle Meats margin at one stage this was 83 euro/head which equated to less than a 2% margin(1.6-1.9%). Across the rest of the industry this equated to only 32 euro/head. From this Foyle must be killing elephants if 83 euro of a margin transfers into only a 1.6-1.9% margin/head. Average animal is making them a gross return of 4600 and if you take away there average processing costs and margin they are paying farmers over 4K/head for cattle. Next we will have the elephant meat scandal.

At the end he add a note that operating profits dose not take into account cost of interest on debts additional income or taxes. He made no analysis of what way SRM removal effects operating costs. Goodman is one of only two owners of SRM processing plants. What he charges other independent plants and knackerys would effect profitability right across the industry.

Then on page three we have a big picture of Justin and Joe holding a sign for save our sucklers. It would be more apt if they has a sign say save the suckers. Because the FJ is not helping beef farmers with its lazy journalism.

It must annoy the hell outa you that the IFJ are able to make a profit and provide employment.
If I'm not happy with a service/product I just walk away, I try not to go on and on and on............and on........and on about it

Bass Reeves

wrangler wrote: »

It must annoy the hell outa you that the IFJ are able to make a profit and provide employment.
If I'm not happy with a service/product I just walk away, I try not to go on and on and on............and on........and on about it

Unfortunately they are considered the voice of the Irish farmer. If I as an individual do not read there articles and analyse what they write I am leaving them publish what is often misinformation. If you remember back to the IFA debacle I was critical of there journalistic support which proved correct after.

Take the article in this weeks journal it has informed the public that meat processors operate at wafer thin margins and from the article we see that they have miscalculated some figure. Now maybe they are right maybe the margins are wafer thin down at 2%. Personally I think we would have had processors liqudations like Kerry beef and Lamb every 3-5 years if margins were that thin.

But we have not has such liquidations but we have seen the bigger players move to consoildate there hold on the business. But investigative journalism in the FJ tends to be of a poor quality. There publication of raw data is often helpful and I buy it for such raw data, cattle prices etc and to access information about department schemes etc.

You the attitude of ignoring fundmental flaws in information supplied and not analysing it is often farmers downfall

By the way if above is you best attempt at a rebuttal of my analysis I am not surprised as you again attempt to silence anyone with a different opinion.

wrangler

Bass Reeves wrote: »

Unfortunately they are considered the voice of the Irish farmer. If I as an individual do not read there articles and analyse what they write I am leaving them publish what is often misinformation. If you remember back to the IFA debacle I was critical of there journalistic support which proved correct after.

Take the article in this weeks journal it has informed the public that meat processors operate at wafer thin margins and from the article we see that they have miscalculated some figure. Now maybe they are right maybe the margins are wafer thin down at 2%. Personally I think we would have had processors liqudations like Kerry beef and Lamb every 3-5 years if margins were that thin.

But we have not has such liquidations but we have seen the bigger players move to consoildate there hold on the business. But investigative journalism in the FJ tends to be of a poor quality. There publication of raw data is often helpful and I buy it for such raw data, cattle prices etc and to access information about department schemes etc.

You the attitude of ignoring fundmental flaws in information supplied and not analysing it is often farmers downfall

By the way if above is you best attempt at a rebuttal of my analysis I am not surprised as you again attempt to silence anyone with a different opinion.

and you think you can silence a national newspaper just because it doesn't agree with you...you don't have to buy if you don't like it.
You can apply some sort of a conspiracy to any story in any paper......if you're paranoid.
Unlike farmers they're not going into a protected market, nor are they subsidised, yet they're making a profit and providing employment. Have you not got the nerve to call it on what you call misinformation, are you afraid they'll rubbish you like I do...........criticism from anonymous forum is going nowhere.

I'm calling it now, get out from behind your false name and accuse them of what you're saying here on their letters page.

blue5000

Mod note Can you two take a chill pill and calm it down a bit please, next step is a card.

Bass Reeves

wrangler wrote: »

and you think you can silence a national newspaper just because it doesn't agree with you...you don't have to buy if you don't like it.
You can apply some sort of a conspiracy to any story in any paper......if you're paranoid.
Unlike farmers they're not going into a protected market, nor are they subsidised, yet they're making a profit and providing employment. Have you not got the nerve to call it on what you call misinformation, are you afraid they'll rubbish you like I do...........criticism from anonymous forum is going nowhere.

I'm calling it now, get out from behind your false name and accuse them of what you're saying here on their letters page.

First off I never indicated that there was conspiracy theory. I have no such thoughts even though the editor had at one stage accepted an offer of employment ftom a meat processing group. I mearly indicated that the article was full of errors. My own opinion is that it was a lazy article a page and headline filler. Not only a poor article but poor editing. I presume that such article are proof read by the editorial staff. If so a simple mathematical error in the percentages involved with the 32 euro and 83 euro figure are national school maths. It should have jumped out at whoever proof read the article.

The FJ has priority access more than any other agri based paper to other sectors of the agri industry. Because of that It has responsibilities to make sure it analysis is correct.

I be slow writing into there letters page as they reserve the right to edit these letters and have done so recently in Marian Harkins case to give a false impression of her submission and to quote her out of context

wrangler

Bass Reeves wrote: »

First off I never indicated that there was conspiracy theory. I have no such thoughts even though the editor had at one stage accepted an offer of employment ftom a meat processing group. I mearly indicated that the article was full of errors. My own opinion is that it was a lazy article a page and headline filler. Not only a poor article but poor editing. I presume that such article are proof read by the editorial staff. If so a simple mathematical error in the percentages involved with the 32 euro and 83 euro figure are national school maths. It should have jumped out at whoever proof read the article.

The FJ has priority access more than any other agri based paper to other sectors of the agri industry. Because of that It has responsibilities to make sure it analysis is correct.

I be slow writing into there letters page as they reserve the right to edit these letters and have done so recently in Marian Harkins case to give a false impression of her submission and to quote her out of context

The target of your accusations and now your inference should be allowed refute on a proper forum, TBF

wrangler

patsy_mccabe wrote: »

'Prime Beef throughput' at Irish Beef plants for the full year 2017. Values are weekly kills.
Source Bord Bia.
Almost a constant weekly throughput.

Is that not what the factory feedlots are about, to ensure the constant throughput,

Willfarman

The article has fractionally more merit the spakes of the drunken gom in the pub. But argue as we may about it whether you are a humble farmer, farm union rep or agri journalist trying to accurately figure processing margins your time would be as productive scratching your head while staring into a ditch for answers. The data available publicly is so scant.

Pidae.m

Willfarman wrote: »

The article has fractionally more merit the spakes of the drunken gom in the pub. But argue as we may about it whether you are a humble farmer, farm union rep or agri journalist trying to accurately figure processing margins your time would be as productive scratching your head while staring into a ditch for answers. The data available publicly is so scant.

Friend of mine who is an accountant with one of the big 4 done an audit on a factory once & said no matter how many times he asked , he was never directly told how they calculated the price that should be paid to farmers. I told him when it rains price goes down, over supply price goes down.

patsy_mccabe

wrangler wrote: »

Is that not what the factory feedlots are about, to ensure the constant throughput,

Yes, and I have absolutely no problem with that (despite what other posters on here might say about it). Being able to guarantee a constant supply increases your bargaining power with your customers, the large supermarkets.