Beef prices: More bite to the trade but quotes slow to increase

There is increasing pressure on beef factories to pay more for cattle. Despite the lower kill during the week ending April 22, procurement managers have indicated that cattle supplies remain relatively good on the ground at the moment.

In addition, some procurement managers have noted that supplies are expected to decrease over the coming weeks, which could lead to price increases.

For the most part, factories are offering base quotes of 405c/kg for steers and 415c/kg for heifers; these quotes exclude Quality Assurance bonuses

However, some finishers have noted that buyers are willing to pay 5c/kg on top of base quotes to secure supplies. At the upper end of the scale, this brings steers to 410c/kg and heifers to 420c/kg.

During the week ending April 22, in-spec, R+3= heifers made a top price of 444.05c/kg, while the average price paid stood at 434.25c/kg.

In addition, a top price of 424.66c/kg was achieved for R+3= steers; the average price paid for these animals stood at 419.28c/kg.

The cow trade

There is quite a variation in the prices being quoted to farmers for cows and this depends on the quality and grades being presented. The location and demand of individual processing plants also has to be factored into the equation.

The strong demand for factory-fit cows has filtered through to mart level, with demand for these animals on the increase.

Buyers are offering 330-340c/kg to purchase P-grade animals. In addition, procurement managers are starting negotiations with farmers for O-grade and R-grade cows at 350c/kg and 360c/kg respectively.

Supplies

Cattle supplies decreased during the week ending April 22, with 33,374 head slaughtered, figures from the Department of Agriculture show.

Looking at the beef kill in more detail, some 3,024 young bulls were slaughtered in Department of Agriculture approved beef plants during the week ending April 22. This was back by 251 head or 7.6% on the week before.

Heifer and cow throughput has also declined on a week-to-week basis, with supplies down by 208 head and 810 head respectively. In addition, the number of aged bulls processed fell by 96 head on the previous week’s kill.

However, steer supplies increased during the week ending April 22, with throughput up by 43 head or 0.34%.

Week-on-week beef kill changes:
  • Young bulls: 3,024 head (-251 head or -7.6%);
  • Aged bulls: 609 head (-96 head or -13.6%);
  • Steers: 12,585 head (+43 head or +0.34%);
  • Cows: 7,534 head (-810 head or -9.7%);
  • Heifers: 9,622 head (-208 head or -2.1%);
  • Total: 33,374 head (-1,322 head or -3.8%).

‘More positive prospects for the trade in 2018’

At the EU Commission Beef Meeting held in Brussels last week, the Irish Farmers’ Association’s (IFA’s) national livestock chairman Angus Woods outlined that there was a more positive tone to prospects for the trade for 2018.

According to the IFA, the EU Commission is forecasting an increase in consumption of 0.4% and only a very small rise in production of 0.13%.

“The Commission is also forecasting that EU prime beef prices should rise by 1.3% and cow prices look set to increase by 3.83% in 2018,” Woods explained.

“All the figures point to a strong recovery and growth in beef consumption across the EU markets, with overall EU imports up and exports down for the first two months of 2018,” he concluded.