Processors in strong position as supply rises to beef factories
As the intake continues to rise, processors have moved to reduce quoted prices for stock as much as 5 cents/kg, in a disappointing turn to the trade for cattle farmers, whose expectations of a strong pre-Christmas trade have been shattered.
The supply increased to around 33,600 head last week, a lift of around 500 over the previous week.
In an unusual deviation from the normal seasonal pattern of the trade, the peak of the autumn/winter kill has come in December, rather than the traditional October or early November peak.
Quoted base prices for steers are back to 385 cents/kg at most of the factories this week, as pressure on processors to source stock for the busy pre-Christmas kill has reduced.
Some of the stock for this week were bought forward at up to 390 cents/kg, and some farmers are reporting that they successfully negotiated for 390 cents this week, but it has become much more difficult to reach that price than in recent weeks.
Some processors are advising farmers that there is a ‘waiting list’ to get cattle killed.
Heifer prices are holding more stable, at the previous week’s prices.
The quoted base for heifers at most of the factories is unchanged at 400 cents/kg, with a few cents more being negotiated by some farmers.
Processors are in a strong position now to hold a tight rein on prices, with their pre-Christmas requirements secure.
Cow prices have also taken a dip this week, with the prices for P-grade dipping below 300 cents/kg.
The general quote for O/P-grade is 295-315 cents/kg.
The better quality R-grade cows are making 330-335 cents/kg.
In Britain, the R4L-grade steers remain relatively stable in sterling price terms, and equivalent to 522 cent/kg (including VAT).
The trade is reported to have slowed for steaks, with demand best for diced beef and round cuts.
Increased competition is reported on the back of a rise in imports of cheaper product from mainland Europe in recent weeks.
In France, the trade remains stable, with demand still slow, particularly at foodservice level, with fewer people eating out.
This has negatively impacted the trade for thick skirts and flank steaks. Demand is reported to be strongest for tongues and fillets.
In Italy, some signs of improvement in the beef trade are reported, as consumption rises ahead of the traditionally busy Christmas period.
