Going by this week’s factory quotes, it seems most processors have held prices at the same level as last week for the four-day kill this week.
The June Bank Holiday weekend sees most factories operating a short week, resulting in less cattle needed to fill kill sheets and turning the supply/demand dynamic slightly in favour of the processors.
Despite this, factory cattle price is in a very strong position and most beef finishers would agree that a steady trade at current levels would offer buyers more clarity than erratic movement in price.
With positive cattle prices currently, the advice to farmers remains to sell cattle as they come fit.
The top offers for steers and heifers this week are €5.35/kg and €5.40/kg on the grid respectively, for in-spec heifers and steers ranging from 300-400kg.
Most of the processors in the northern half of the country are putting forward quotes 5c/kg short of this and in the south, some processors are dragging their heels up to 10c/kg on quotes but are likely paying more to regular suppliers.
Cows are trading at €5.10-€5.20 for U-grades, with €5.00-€5.10 on offer for R-grade cows.
O and P-grade cows are being quoted at €4.90 for heavy O+ cows to €4.70/kg for plainer P-grade cows. Heavy, fleshed cows in their respective grades always have the scope to secure a few cent more.
Under-24-month bulls are ranging from €5.15/kg for P-grades and €5.25, €5.35 and €5.45/kg for O, R and U-grade bulls respectively.
Finally, under-16-month bulls are being quoted at €5.25/kg on the grid.
There was a noticeable change in the tone of conversations among factory procurement managers this week, with many trying to talk down the current trade for cattle. While this is the oldest trick in the book from factories, especially after a bank holiday weekend, it should still be heeded.
Weekly cattle throughput figures have fallen over the past two weeks, however, the number of cattle processed to date is running over 74,000 cattle ahead of last year at just over 711,000 head (excluding veal).
Supply is forecast to rise by 90,000 cattle this year and with the majority of these extra cattle gone through the system already, it avoids the risk of a deluge of finished cattle coming out later in the year.
Market insights
The average reported R3 steer price continued to climb for the week ending May 21, jumping by 12c/kg on the previous week to reach €5.15/kg.
Heifer prices also continued to increase and jumped 10c/kg to €5.15/kg on the previous week.
According to Bord Bia, in the corresponding week in 2021, the R3 factory steer and heifer prices were €4.13/kg and €4.17/kg, respectfully.
Reported prices exclude VAT but include all bonuses such as for breed-based producer groups.
Bord Bia has noted that this places the Irish R3 steer price last week €1.02/kg or 25% higher than during the same week in 2021, while the R3 heifer price was 98c/kg or 24% higher than the corresponding week in 2021.
However, while this increase does reflect a strong increase in the year-on-year beef price, the increased returns are being eroded by higher input costs at farm level.
As of the week ending May 21, global beef prices remain strong, with the average R3 young-bull price in the EU seeing strong growth over the last number of weeks, but declining by 2c/kg the week of May 14, to land at €5.13/kg (excluding VAT).
The latest reported prices for Irish R3 steers have crept up to this figure after increasing to €5.15/kg. The UK R3 steer price also increased by 4c/kg, equating to €5.21/kg.
The Irish prime composite cattle price and the prime export benchmark for week ending May 14, 2022 were equivalent to €5.00/kg and €5.06/kg dead weight, respectfully, excluding VAT.