Beef trade: Farmers dig heels in on factory base quotes

Normally, at this time of the year, beef supplies begin to tighten and farmers have more bargaining power when it comes to marketing their finished stock.

While the number of cattle being presented for slaughtered has decreased in recent weeks, the factories seem happy with these lower numbers.

And, to add to this, reports of a 5c/kg cut from base quotes began to do the rounds early last week. However, this is meeting stern opposition from farmers. And, beef producers are urged to bargain hard when agreeing on a final price.

For now, the majority of processors are still working off a base of 375c/kg for steers and 385c/kg for factory-ready heifers, but some are operating off 370c/kg for steers and 380c/kg for heifers.

While the prime cattle trade is unsteady, cows are more stable. Beef buyers are starting negotiations with farmers for cows at 260-280c/kg for P-grade cows.

In addition, 290-300c/kg is on the table for O-grade animals and 300c/kg upwards is being quoted for R-grade cows. However, the location and demand of individual processing plants plays a role in the price being quoted to farmers for cows.

The bull trade remains difficult. Factory agents are quoting 310-340c/kg for O-grade bulls, while R-grades are moving for 340-350c/kg; procurement managers are quoting 360-370c/kg for U-grades.

The kill

Some 35,788 head of cattle were slaughtered in Department of Agriculture approved beef exporting plants during the week ending March 17.

If we exclude calves, the total number amounts to 34,154 head. When compared to the previous week’s kill, all categories recorded a decrease.

The number of young bulls bought by beef processors fell by 18 head, while the number of aged bulls decreased by 15 head.

The steer category recorded the largest drop; the number of these animals dropped by 548 head on the previous week.

Cows decreased by 115 head and the number of heifers slaughtered fell by 496 head.

Week-on-week beef kill changes (week ending March 17):
  • Young bulls: 4,997 head (-18 head or -0.3%);
  • Bulls: 634 head (-15 head or -2.3%);
  • Steers: 11,552 head (-548 head or -4.5%);
  • Cows: 6,724 head (-115 head or -1.6%);
  • Heifers: 10,247 head (-496 head or -4.6%);
  • Total: 35,788 head (-1,515 head or -4.0%).

Yearly supplies

The total number of cattle slaughtered in Department of Agriculture approved beef exporting plants has surpassed 400,000 up to the week ending March 17.

All categories with the exception of aged bulls have recorded increases, with the overall figure of 31,197 ahead of the same period in 2018.

Week-on-week beef kill changes (week ending March 17):
  • Young bulls: 64,143 head (+8,012 head or +14.2%);
  • Bulls: 5,445 head (-202 head or -3.5%);
  • Steers: 123,273 head (+2,267 head or +1.8%);
  • Cows: 78,975 head (+5,872 head or +8.0%);
  • Heifers: 119,798 head (+12,549 head or +11.7%);
  • Total: 400,181 head (+31,197 head or +8.4%).