Beef market report: Beef supply picks up in response to price gains

Cattle prices at the beef factories held steady this week, while the intake continued an upward trend for the second consecutive week.

Finishers have commenced delivering stock to the factories off grass at the earliest opportunity, to benefit from the higher prices which the tightening in supply delivered over recent weeks.

Prices were maintained across the country over the past week, while intake showed an increase of 1,500 head, as the supply recovered to around 29,000 head.

Quoted base prices at the factories have been maintained at 420-425 cents/kg for steers this week.

Most cattle farmers are holding out for a base of 425 cents/kg, but there are indications that factory agents are toughening their stance on price, as the gradual increase in supply begins to ease pressure on processors to meet their beef orders.

Heifer prices are being maintained at a premium of 10 cents/kg over steer prices, with a base of 430-435 cents/kg the going rate, and any extra payment dependent on how hard the farmer bargains, and the local beef cattle supply and demand.

It has become fairly clear now that prices have peaked, and the challenge for cattle farmers will be to retain them at the current level for as long as possible.

As the beef cattle intake edges closer to 30,000 head per week, the challenge will become tougher. The rush by farmers to avail of current improved prices will push the supply upwards over the coming weeks.

This will affect the price, especially if the intake goes over 30,000 cattle per week.

Processors are complaining that current prices are not sustainable, relative to the returns they get from the beef market.

Cow prices are also holding steady this week, at a base of 350-385 cents/kg for O/P-grades, and around 390-395 cents/kg for Rs.

In Britain, R4L-grade steers are averaging equivalent to 500 cent/kg (including VAT). An improvement in the trade is reported, on the back of some tightening in supplies. Demand is best for steak cuts.

In France, little change has been reported in the beef trade, with promotions taking place on roasting cuts.

In Italy, the trade continues to be affected by slow demand and increased competition.