The meltdown in beef prices at the factories continued this week with further cuts across most of the categories, knocking another slice off the returns to finishers.
Most processors have reduced the base price for steers by a further 5 cents/kg to 350 cents/kg, and the prices for heifers have been cut as much as 10 cents/kg, bringing the base to 355 cents/kg at some plants.
While some cattle processed this week were bought at last week’s prices, finishers say it has become very difficult this week to negotiate for better than the quoted base prices for steers, heifers, or young bulls.
Three weeks ago, some finishers were advised by factory buyers that the steer price would be 350 cents/kg before the end of July.
Finishers kept that in the back of their minds, and feared the worst, which may have influenced the continued strong supply of cattle to factories, in hope of beating the price cuts.
“The factories have skinned us on prices, and they are digging their heels in with a take it or leave it attitude, by putting suppliers on a waiting list with no commitment to prices forward” one angry finisher complained.
The base price for young bulls has also been affected, cut to 10 cents/kg below the steers, at 340 cents/kg for R-grade, before any penalties for heavier carcases are applied. January 2017 born steers are now running into the overage category, which is incurring a 10 cents/kg penalty, typically costing a further €35/head reduction in the return on a 350kg carcase.
While kill numbers continue very strong, with the intake for last week running at over 34,800 head, a level at which finishers have been left with very little power to bargain on price, the supply for the week was around 1,500 head less than the same week last year.
Many finishers’ cattle are now being put on a two-week waiting list, and will have to take the price on the day of supply, which is a very unsatisfactory situation in which to operate.
The only sector holding its own price-wise is cull cows, for which there is good demand at factories, at steady prices. At the upper end, the better quality R-grade cows are making up to 310 cents/kg, with the better O-graders at 290 cents/kg, and the more Friesian types at 280 cents/kg, while the P-grade, in general, are on around 270 cents/kg.