Beef market report: Processors pay more to get through lean period
The overall average being paid for both steers and heifers is showing an increase of around 5 cents/kg this week, with steer prices appearing to have benefited slightly more than heifer prices.
Quoted prices for steers are now on a base of at least 400 cents/kg, with some sellers securing up to 405 cents/kg as a base this week.
The premium on heifer price premium over steer prices is 10 cents/kg in general, but sellers of better quality heifers are negotiating a little extra.
The supply of finished cattle increased by around 500 head last week, to 28,326, but processors appear to be coming under more pressure this week to source sufficient stock to meet their market requirements — hence the long awaited improvement in prices.
After the latest spring for grass growth for a few years, delivery of the first of the cattle off grass is still several weeks away, and processors know that they are heading into a lean period.
The one category not showing a lift in price this week is the poorer grading cow.
Quoted prices remain largely unchanged at 310-335 cents/kg for O/P-grade cows.
Prices for the better quality R-grade cows are showing some improvement, with up to 355 cents/kg on offer as a base.
The supply of cattle is also tightening in Britain, where there has been a slight turnaround in the downward trend in prices of previous weeks.
The average for R4L-grade steers has lifted slightly to around 323.2p/kg, which is equivalent to 432 cents/kg (including VAT), at 78.8p for €1.
UK heifer prices are also at about 432 cents/kg on average. The trade is reported best for topsides and rump steaks.
In France, little change in the beef trade has been reported, with demand best for entrecotes and flank steaks.
It remains difficult to get imported product into retailers due to continued focus on home-produced beef.
Limited beef promotions continue to focus on striploins produced in France. Italy is also reporting very little change in the beef market.
On the wider global market, Bord Bia says cattle throughputs have recovered in Uruguay after a period of tight supply. In Argentina, cattle supplies were lower in April.
In the US, data for the first quarter of the year showed a 5% rise in production, with a similar increase forecast for the full year.
Higher production is expected to lead to a rise in exports for the full year, and imports are forecast to show a decline.
