Delicate balancing act by producers and processors
There is no change in the actual prices being paid for stock by the factories for this week. The official quotes are almost identical to a week earlier and a majority of the factories are finding it necessary to pay over the quoted rates for most of their intake to maintain the supply.
The quoted base price for steers is ranging 350-355 cents/kg (125-127p/lb). Most of the stock being killed this week are going in to the factories at around 5 cents/kg more than the quoted price, particularly at the factories at the lower end of the price range.
Heifer quotes are generally at 5 cents/kg (2p/lb) more than the steers, but reports from around the country indicate that the actual price at which the heifers are changing hands is up to 10 cents/kg (4p/lb) more than the quotes.
Last week’s kill at around 30,450 head, maintained the 30,000 head plus intake for the second consecutive week, but still runs more than 1,000 head lower than this time last year.
The trade is entering a critical period of the year. Any significant increase in supply above 30,000 head/week will strengthen the hand of the processors to bring prices back, which in recent months they have been unable to do, because of the tight balance between supply and demand.
Orderly marketing by producers will be essential over the coming weeks if the pressure is to be maintained on the factories to hold current prices. The supply of cattle available for the remainder of the year is tight, which should benefit producers if there is no rush to sell.
The trade in the UK, continued steady over the past week, reflecting on-going tight supplies. Prices are reportedly strengthening across all parts of the carcase with no evidence of weakening.
Prices have firmed with R4L grade steers averaging at Stg 320.4 pence/kg which is equivalent to 380 cent/kg (136p/lb) incl Vat.
On the Continent, the demand over the past week remained steady for hindquarter product in response to good weather conditions being experienced across some of the key markets.
The best trade was reported for fillets and ribs. It is expected that the trade for forequarter product should seasonally improve over the coming weeks.
The cow trade is also holding strong at prices similar to recent weeks. The base price for O/P grade cows is continuing to run at 291-310 cents/kg (104p-111p/lb) with very good demand for the heavier cows.
The quality cows making R grade are in keen demand and producers with heavy continentals should be dealing for up to 330 cents/kg (118p/lb) for these which are selling extremely well at the live sales.
