Beef price pull begins in earnest
Beef cattle prices are under pressure as factories have moved to knock 5-10c/kg off steer and heifer base quotes.
The beef market has remained relatively stable over the last four weeks. However, factories have now acted to drop steers to 395-400c/kg and heifers to 405-410c/kg. Both of these prices exclude Quality Assurance Scheme bonuses.
In recent weeks some farmers, particularly those with large numbers to market, have been able to secure an additional 5c/kg on top of the base price.
However, factory buyers have been given clear instructions to keep the upper end of steer prices to 400c/kg this week. And, as a result, the level of negotiating power available to farmers is likely to be reduced.
This week’s price cuts look likely of being replicated in the coming weeks, and if the rumor mill is to be believed, factories are aiming to bring steer quotes back to a base price of 380c/kg.
Despite the fall in prime cattle prices, the cow trade remains relatively unchanged from last week and most buyers are continuing to offer 350c/kg for R-grade cows and 330-340c/kg for O-grade animals. Click here for an in-depth breakdown of beef prices
Many procurement managers have suggested that cattle prices have been unseasonably high in recent weeks.
And, this week’s price cuts could be seen as an attempt by factories to get on top of prices before supplies peak later in the year.
As it stands, some 932,112 cattle have been slaughtered in Irish plants this year – an increase of 44,382 head on the corresponding period in 2016.
Figures from the Department of Agriculture show that some 31,891 cattle were slaughtered in approved export plants during the week ending July 23. This is an increase of 467 head or 1.5% on the number slaughtered during the previous week.
Increases were witnessed in the number of steers and heifers slaughtered during the third week of July. Steer throughput increased by 3.7% and an additional 236 heifers were slaughtered in export approved beef plants.
Despite this, there was actually a fall in the number of young bulls, aged bulls and cows slaughtered in department approved beef export plants during the week ending July 23.
- Young bulls: 2,616 head (-145 head or -5.3%);
- Aged bulls: 599 head (-51 head or -7.8%);
- Steers: 13,061 head (+464 head or +3.7%);
- Cows: 7,711 head (-45 head or -0.6%);
- Heifers: 7,854 head (+236 head or +3.1%);
- Total: 31,891 head (+467 head or +1.5%).
The British beef trade continued to remain steady last week, according to Bord Bia, as good demand and relatively tight supplies of finished cattle helped the trade.
Prices from the AHDB show that British R4L steers made the equivalent of 428.94c/kg during the week ending July 22. In addition, Northern Irish and British heifers made 414c/kg and 426c/kg respectively.
Moving to France, Bord Bia says, the market continues to remain slow with the trade down for most cuts and an abundance of competitively priced domestic, German and Polish beef on the market.
Furthermore, a limited number of retail promotions took place last week and these were mainly focused on French-origin steaks.