Beef trade: Base quotes continue to move in the right direction for farmers

As has been the case in recent weeks, beef cattle supplies remain relatively tight and factories are continuing to hunt for cattle.

This week, the majority of meat processors are starting negotiations with beef farmers at 415c/kg for bullocks and 425c/kg for heifers.

Some factories – operating of the lower quotes of 410c/kg for steers and 420c/kg for heifers – have noted that these prices will increase as the week progresses.

Farmers – especially those with large numbers of in-spec stock to sell – are finding that 5c/kg on top of the base quotes is achievable. This brings heifers to 430c/kg and bullock quotes to 420c/kg.

When it comes to marketing cattle, farmers should bargain with procurement managers; deals can be done on age limits, transport costs and carcass weights.

The higher prices look set to continue for the near future as factory agents entice finishers to market their cattle. Some procurement managers have mooted that cattle supplies look set to remain tight well into the month of June. This will be welcome news for beef finishers.

During the week ending May 13, in-spec, R+3= heifers made a top price of 451.85c/kg, while the average price paid stood at 441.42c/kg.

Furthermore, a top price of 438.04c/kg was achieved for R+3= steers; the average price paid for these animals stood at 428.45c/kg.

Cows

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.

Buyers are offering 340-350c/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 370c/kg respectively. Factories are quoting prices of 380c/kg upwards for U-grade cows.

During the week ending May 13, O=3= cows made a top price of 371.32c/kg, while the average price paid stood at 362.26c/kg.

Cattle supplies continue to tighten

For the fourth consecutive week, the total number of cattle processed has declined. A decrease in throughput – across all categories – was recorded. However, the May bank holiday affected cattle processing.

Figures from the Department of Agriculture show – that during the week ending May 13 – some 29,402 head of cattle were slaughtered.

Some 3,367 young bulls were slaughtered in Department of Agriculture approved beef plants during the week ending May 13. This was a decrease of 133 head or 3.8% on the week before.

beef

Heifer and cow throughput also decreased with supplies down by 526 head and 508 head respectively; heifer throughput stood at 8,239 head, while 6,590 cows were processed. In addition, the number of aged bulls processed fell by 33 head on the previous week’s kill.

Moving to steer throughput, supplies of these animals also decreased during the week ending May 13; the number of steers processed fell by 382 head or 3.5%.

Week-on-week beef kill changes (week ending May 13):
  • Young bulls: 3,367 head (-133 head or -3.8%);
  • Aged bulls: 643 head (-33 head or -4.8%);
  • Steers: 10,563 head (-382 head or -3.5%);
  • Cows: 6,590 head (-508 head or -7.1%);
  • Heifers: 8,239 head (-526 head or -6.0%);
  • Total: 29,402 head (-1,543 head or -5.0%).

The British market

According to the the Agriculture and Horticulture Development Board (AHDB), some 31,900 head of cattle were slaughtered in Britain during the week ending May 13. This was a 3% decrease on the number processed during the corresponding period in 2017.

The AHDB reported that – during the week ending May 13 – the average price paid for prime cattle stood at 365.56p/kg (417c/kg).

Looking at heifer returns, the overall price achieved by these animals was 418c/kg, while R4 heifers made the equivalent of 431c/kg.

Steer returns increased and the overall price paid for bullocks stood at 367p/kg (418c/kg); steers falling into the R4 category traded at the equivalent of 432c/kg.

Moving to young bull returns, overall prices increased by 3.4p/kg to the equivalent of 399c/kg.

In addition, overall cow prices were reported to have increased during the week ending May 13. However, prices for cows falling into the O4 category decreased; these animals averaged the equivalent of 322c/kg.