Prices ‘into the red’
Most factories this week quoted 88p and back as far as 83p/lb for R and O grade cattle, amid reports that some were attempting to impose even deeper price cuts.
But, as prices dropped to their lowest for 2004, and many farmers “moved into the red”, there were some slightly hopeful signs of a tightening in supply of under-age beef cattle.
Farmer resistance to price cuts may be one reason for that, but an equal factor, if not more important, is the calendar. All March 2002 born calves are now gone over 30 months, and there was undoubtedly a push in the second half of September to sell them under 30 months. According to the Cattle Movement Monitoring System, male births were down 50,000 head on March 2002, and heifer calf registrations 45,000 head lower, which should take effect on supplies to factories this month.
Supply of under 30 months cattle has probably passed the seasonal peak, but there is still a good proportion of over-age cattle being supplied. The over-age penalty was increased to 3p or 4p per lb at some factories this week, and there were isolated reports of cuts of 5p/lb - which would be the largest ever - attempted by some processors.
However, where over-age animals were being supplied in a mix with young stock, it was harder for factories to penalise heavily.
Cull cow prices are maintained or slightly firmer. Up to 76p per lb is quoted for heavy cows, but the best are making into the low eighties at the higher paying factories. Cow supplies have increased and are now running slightly ahead of last year.
