Producers ready for cold Christmas as beef prices stall
The recovery in the supply of cattle to the factories in recent weeks has aided the resolve of the processors to resist producer demands for stronger returns in the run up to the seasonal demand for beef for the festivities ahead.
Quoted base prices for the steers continued at 390 cents/kg at most of the plants, with some reports of a few cents/kg more being achieved for very good stock or where the intake fell short of the processors requirement.
The quoted base price for heifers was maintained at a premium of 10 cents/kg over the steers at 400 cents/kg and similar to the steers a few cents more going for some suppliers.
Intake for last week was just over 32,200, confirming that the backlog of supply which had built up on farms during the good weather conditions in October are now coming through to the factories, as was expected.
However, the stronger supply is aiding the processors more than the producers whose anticipation of a strengthening in the returns have been dashed by the easier flow of stock to relieve pressure on the factories at a critical period of the year.
If the present level of supply is maintained over the next few weeks, it is hard to see how finishers are going to get any reward for holding back stock, except for whatever weight gain had been achieved in the meantime, for which the associated costs have to be factored in to conclude the actual benefit.
Within three weeks most of the requirements for the Christmas orders will have been secured by the processors.
It is difficult to envisage sufficient change in the supply over that period to ensure that prices harden by any significant margin before the end of the season.
The cow prices have slipped further with quoted prices back by up to 10 cents/kg this week.
The base for O/P grade cows is ranging 300-325 cents/kg and up to 340-345 cents/kg for the R’s.
In Britain, the average prices for R4L grade steers have remained stable, making on average Stg 356.9 pence/kg which is equivalent to 534 cent/kg (incl Vat).
The trade is reported to be holding steady with supplies adequate to meet current demand levels.
Demand remains slow for steaks but more positive for forequarter product with manufacturing beef also performing well.
In France, there has been little change in comparison with recent weeks and trade is also holding steady in Italy.
