Producers confident despite processors' third consecutive week of cuts
There is confidence among producers that the lower supply of finished cattle for 2025 will ensure demand is strong enough to maintain the trade firm through the year.
Beef prices have been further tightened at the factories this week as the processors erode producers' returns for the third consecutive week.
Despite the trend of recent weeks, there is confidence among producers that the lower supply of finished cattle for 2025 will ensure demand is strong enough to maintain the trade firm through the year.
The forecast is that supply will be more than 100,000 head less than for 2024, and the strength of the beef markets will underpin strong demand for cattle at the factories throughout.
Year to date, the supply at the factories is 11,339 head lower than for the corresponding period last year. The end of 2024 predictions were the 2025 supply would be back about 87,000 head.
The most recent forecast is that the supply for this year will be down by up to 112,000 head, on which basis numbers for the factories for the next eight months could be back by an average of 12,500 per month.
Quotes for this week have been reduced by up to 10c/kg for the prime categories, and deals for above the factory quotes have become more difficult to pin down, and 'flat' price deals are now far less available than they were a month ago.
The year-to-date supply to the factories is up 11,339 head on the same period last year. Steers represent the largest drop, with intake down by 13,000 head.
The end of 2024 predictions were 2025 supply would be down. The general run of base quotes for steers for this week is 740c/kg. While last week's prices are being honoured for cattle bought forward for this week's kill, the pullback on the higher prices is becoming more evident as a result of factory policy.
However, for the most part, the lower end of the quotes for heifers are on par with the steers at 740c/kg this week, with a good percentage of the suppliers getting up to 745c/kg and a few c/kg above that.
The cows are in strong demand, and prices appear to have steadied a bit. The well-fleshed R-grade cows are making 710-720c/kg.
Prices for young bulls have slipped to under the similar grade steer, with Rs being quoted at 710-720c/kg this week.
The supply for last week was 33,207 head, on par with the same week last year and also similar to recent weeks.
The intake included 12,961 steers, 10,344 heifers, 7,654 cows, and 1,601 young bulls.
