Factories hold price line as supply eases pressure

Beef factories are firmly holding the line on the prices for cattle this week as supply eases the pressure on the processors.

There was no change in the quoted prices for stock as the stronger than expected supply of cattle to the factories has undermined the prospect of higher prices for beef producers who have targeted the requirements for the pre-Christmas trade, with the autumn bought-in stock in their anticipation of a reasonable margin.

Intake at the plants last week came within a couple of hundred head of the corresponding week in 2011 for the first time in 2012, relieving the processors of the necessity to increase prices to secured the additional supplies required for the Christmas market, one of the most important periods of the year for the meat factories.

The supply on offer of approximately 32,980 head last week — which was much stronger than had been expected when producers panned forward last Autumn — has dealt a blow to their expectations on price.

Base prices for steers are quoted at 395-400 cents/kg unchanged from the previous week and producers are experiencing a battle to get 405 cents/kg this week.

The heifer trade is offering a bit more hope. Base prices are quoted at a premium of 15 cents/kg over the steers and prices being paid for stock are showing the same margin of difference.

Including stock bought forward for slaughter next week, the factories are now confident of being in a secure position for the Christmas trade by the end of this week, following which lower supplies will be adequate for the remaining weeks of 2012.

In contrast to the Irish situation the trade in the UK has firmed over the past week in response to the strong Christmas demand combined with supplies remaining tight.

Solid demand is reported for fillets and rumps, especially in the foodservice sector.

Trade for forequarter product continues to remain steady. However, demand for round cuts and striploins remains flat.

Prices have firmed with R4L grade steers making Stg 368.5 pence/kg which is equivalent to 477 cent/kg (170p/lb) incl Vat a difference of €270/head on a 350 kg carcass comparted to the Irish price.

On the continent, the trade across most of the key markets is remaining relatively steady, with the prices being achieved reflecting this pattern.

The best demand reported continues for forequarter cuts like featherblades and chucks as promotional activity across a number of the key export markets underpines this demand.

Demand for hindquarter cuts such as fillets remains slower than usual, but this trade is expected to return to more normal levels over the next few weeks in the lead up to Christmas.

The cow trade is also stable at prices similar to the previous weeks.

Base prices for O/P cows range 310-350 cents/kg and up to 370 cents/kg for the tops of the R grade cows.

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