No good news in sight as prices still under pressure

It is another difficult week for beef farmers, prices at factories under continuing with downward pressure.

Most processors quote the base price for steers at 380 cents/kg. On top of this, penalties are being imposed for over-age, higher weights, and out-of-QA-spec animals. Some deals have been done with processors for a few cent over the base price, but it has become harder to secure any decent margin above 380 cent/kg this week.

The message from processors is not encouraging for the weeks ahead. Heifer prices, which had been running at around 5 cents/kg over steer prices up to this week, have slipped back to par with the steers this week. The first of the cattle off the grass have commenced arriving at factories, and processors do not expect to come under pressure to get sufficient stock.

Meanwhile, the beef roundtable meeting in Dublin last week has been described by some of the participants as “very disappointing” from a farmer perspective, while others defined it as “a wasted day — it is going nowhere”.

The supply of cattle to factories last week hit the lowest weekly intake year to date, at just under 29,400 head. The June Bank Holiday at the beginning of the week had some effect on supply — it normally has — and it is too early to draw any conclusion on the supply trend, before seeing the figures for this week. Processors are not showing any sign of being under pressure to get stock, and the dip in supply has not affected their determination to bring prices down. Some have further eased the cow prices, quoting back to 270 cents/kg for Ps this week.

The O-grade cows are making up to 290-300 cents/kg, and Rs are worth 330-335 cents/kg. On the ground, farmer concern at the they are getting for finished cattle, and the autumn prospects, is continuing to build.. It is still a guessing game as to where the 2014 beef price will bottom out, after a year-to-date which has been very difficult and disappointing for finishers who took a spring price which was , on average, lower than the previous autumn price — a rare occurrence, and potentially disastrous for finishers.

The trade in Britain eased further over the past week. Cattle prices fell, with R4L-grade steers averaging equivalent to 447 cent/kg (including VAT). On the Continent, little change in the trade was reported across the main markets.