As the August beef kill rolls on, factories have reportedly once again resorted to the oldest trick in the book – dropping quotes on beef cattle in a bid to drive out larger numbers of cattle for processing.
While quotes for Monday, August 16, are set for another drop, this appears to have no reflection whatsoever on demand, as the global consumption of beef continues on an upward trajectory this year, and market reports would indicate demand continues to exceed supply.
While this week’s kill will be well up on last week’s figures, (last week was a bank holiday), throughput appears to have been not as high as factories had anticipated.
However, the Department of Agriculture, Food and the Marine’s (DAFM) official kill figures for this week – which will be released on Tuesday, August 17 – will confirm the total kill numbers for this week.
The move to take prices back further can be seen as an effort by processors to lead farmers to pick up the phone and book cattle in for processing.
However, with a burst of grass growth being experienced in most areas, many farmers will be happy to sit tight and wait out for another few weeks.
However, February 2019-born cattle are coming towards the 30-month age bracket now, which will be a further reason for farmers to move out fit cattle.
The flow of beef cattle generally becomes stronger from now, towards the back end of the year by default, as grass cattle generally become factory-fit in droves.
Despite this, throughput figures are significantly behind last year’s levels, and if weekly kill figures fail to bounce back to a reasonable level, price cuts would likely be reversed and an increase may even be back on the cards.
A move by factories at this time of year to take prices back is not unusual, and providing demand remains consistent with current levels being experienced on global beef markets, farmers can continue to be optimistic for a strong beef price into the back end of the year.