Steer and heifer prices take another hit as factories ramp up pressure

Steer and heifer prices have fallen for the third consecutive week and 15c/kg has now been knocked off base prices in little over 21 days.

Spurred by an increase in the number of grass cattle coming forward for slaughter, factory buyers have knocked another 5c/kg off steer and heifer quotes this week.

Most plants are now offering 400c/kg for steers and 410c/kg for heifers when Quality Assurance payments are ignored. However, some deals are being done at higher prices, although these are becoming more scarce.

Some prominent beef finishers have raised concerns relating to the price cuts being imposed and many are fearful that factory buyers will not stop until they get steers below the 400c/kg mark – something that seemed unlikely when steer quotes were sitting at 420c/kg four weeks ago.

However, price lows of 380c/kg have been mooted and if this holds true, it could have a devastating impact on finishers’ margins.

Some industry sources are also fearful that an influx of cows, from Ireland’s recently-expanded dairy herd, will begin to come on-stream in the coming weeks. One buyer admitted that this could be used as “another stick to beat down the price of prime cattle”.

And with the beef price ball now firmly sitting in the factories’ court, exports may be the only avenue to provide some much-needed competition in the market.

Although finished cattle exports are up already this year, a significant increase in shipments will be required over the remainder of the year to have any real impact on finished cattle prices.

Little movement in cow prices

Despite the downward pressure being witnessed in the steer and heifer markets, cow prices remain largely unchanged from last week.

Most buyers are starting negotiations with farmers at 340c/kg for R-grade cows; 320c/kg is on offer for O-grade animals; and prices of 310c/kg are available for the plainer, O-grade culls from the dairy herd. Click here for a detailed breakdown of prices

Beef cattle supplies increase

Buoyed by an increase in grass cattle supplies, the number of cattle slaughtered in Department of Agriculture-approved beef export plants rose by 11.4% or 3,506 head during the week ending June 18.

All of the categories of cattle showed increases, but steer and heifer supplies were up by 18.8% and 11.7%, respectively, on the previous week’s kill.

A slight increase was also witnessed in terms of cow throughput and supplies of these animals were up by 0.5% when compared to the week ending June 11.

However, it must be noted that some of the increase in supplies may be down to the fact that most processors killed on five days during the week ending June 18, as opposed to four days during the week ending June 11.

In addition, official figures show that there has been some movement in the cumulative cattle this year.

Department figures show that some 769,043 head of cattle have been slaughtered in approved export plants this year – an increase of 34,255 head or 4.7% on the corresponding period in 2016.

Week-on-week beef kill changes (week ending June 18):
  • Young bulls: 4,542 head (+455 head or +11.1%);
  • Bulls: 622 head (+139 head or +28.8%);
  • Steers: 12,133 head (+1,924 head or +18.8%);
  • Cows: 8,300 head (+45 head or +0.5%);
  • Heifers: 8,709 head (+914 head or +11.7%);
  • Total: 34,379 head (+3,506 head or +11.4%).

Main markets

According to Bord Bia, the British cattle trade remained strong last week on the back of tight supplies and good demand arising from recent good weather; this has helped to boost the demand for barbeque products such as steaks and burgers.

Prices from the Agriculture and Horticulture Development Board (AHDB) show that British R4L steers made the equivalent of 424.58c/kg during the week ending June 17, while Northern Irish and British heifer prices stood at 422c/kg.

However, Bord Bia reports that the French market remained slow due to an ease in demand following the recent heatwave.

In addition, retail promotions are continuing, it says, and are focused on domestically-produced items such as striploins, rump and chuck beef.