Beef processors in strong bargaining position

Beef processors have maintained their resistance to farmer pressure on prices, and continued to quote unchanged prices this week.

All processors offer a base of 360 cents/kg for both steers and heifers, despite the ongoing anger of farmers, who continue to feel the pinch of poor profitability.

It’s very difficult to get anything more than the quoted base price for steers, which account for almost half the total weekly intake.

In addition, farmers have to be aware of the penalties which are being imposed very strictly by processors for over-age, over-weight, and non-quality assured stock.

The heifers make a shade more than the quoted base price at some factories, where up to 5 cents/kg extra is being negotiated by farmers.

The strong supply of cattle continues to be one of the biggest obstacles to farmers securing higher prices.

Last week’s kill was just shy of 34,400 head, which leaves the processors in a very strong price bargaining position.

Most of the steers and heifers being supplied are coming from quality assured certified farms, but there is a lot of conjecture as to the percentage on which the 12 cents/kg quality assured bonus is actually being paid.

Nevertheless, it’s almost a non-starter for a farmer not to have quality assurance, with most processors very choosy about even accepting animals over 30 months which are not quality assured certified.

That said, there is a dire need for a lot more clarity surrounding the operation of the quality assurance, and what benefit it has for farmers.

Meanwhile, the cow trade is largely unchanged from last week, with good supplies of cows being delivered to factories currently.

In Britain, cattle prices have risen, with R4L-grade steers averaging equivalent to 474 cent/kg (including VAT).

There has been a further uplift in trade, with a small rise in consumer demand reported over the past week.

In France, the market continued to remain steady last week, with little change reported. Their R3 young bull price was down 3c to 3.67/kg and the O3 cow price was down 6c to 3.33/kg

In Italy, an abundance of competitively priced French cattle on the market has put some pressure on beef prices.

However there continues to be some retail promotional activity to boost demand.