Beef prices stabilise after three weeks of cuts

It’s a case of shutting the stable door after the horse has bolted for beef prices, as many factories have opted to keep quotes at last week’s levels.

Procurement managers had worked to drop base quotes by 15c/kg over the past three weeks and now that prices are sitting around the 400c/kg mark, many have decided to steady the ship.

The majority of processors are now offering 400c/kg for steers and 410c/kg for heifers – a far cry from the 420c/kg and 430c/kg on offer a few weeks ago.

Taking a 380kg steer carcass as an example, the price cut represents a value loss of €57/head and this is bound to have a negative impact on finishers’ margins.

However, finishers have been more stern in their marketing in recent days and many producers with large numbers to slaughter are holding out for 405c/kg for steers and 415c/kg for heifers.

Moving on to the cow trade, the majority of processors have held cow quotes at last week’s levels. Well-fleshed, R-grade cows are sitting at 340-350c/kg, 320c/kg is being offered for P grades and 310c/kg for the plainer O-grade animals.

‘No market basis for price pressure’

Last week, the Irish Farmers’ Association’s Angus Woods hit out at factories for paying prices that were not reflective of the strong market sentiment that continues in the UK and EU beef markets.

The lighter carcass weights this year; the strong live export trade to international markets; and the increased kill to-date – along with the drop in slaughterings in Britain – all contribute to less beef being available and provide very favourable market conditions for our beef.

Woods added there is no backlog of beef in store and supplies of in-spec cattle on the ground are not meeting demand from factories to make up the supply deficit in Britain.

There is evidently no market basis for pressure on cattle prices at present, he said, and this move by the Irish factories to pull quotes and talk down the trade is an attempt to force out very tight supplies of prime cattle by undermining confidence.

Supplies ease back slightly

There was a slight ease in the number of cattle slaughtered in Department of Agriculture approved beef export plants during the week ending June 25.

In total, some 33,961 cattle were slaughtered during the second last week of June – a fall of 418 head or 1.2% on the week before.

Some 7,643 cows were slaughtered during the week ending June 25, which is a drop of 657 head or 7.9% on the previous week. There was also a slight ease in heifer throughput, which declined by 1%.

However, all of the other categories of cattle showed increases as an additional 21 young bulls, 35 aged bulls and 322 steers were slaughtered in approved export plants.

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

Department figures show that some 803,004 head of cattle have been slaughtered in approved export plants this year – an increase of 36,698 head or 4.8% on the corresponding period in 2016.

Week-on-week beef kill changes (week ending June 25):
  • Young bulls: 4,563 head (+21 head or +0.5%);
  • Bulls: 657 head (+35 head or +5.6%);
  • Steers: 12,455 head (+322 head or +2.7%);
  • Cows: 7,643 head (-657 head or -7.9%);
  • Heifers: 8,619 head (-90 head or -1%);
  • Total: 33,961 head (-418 head or -1.2%).