Cattle mart report: Processors plan to hold trade at 365 cents/kg

As the beef trade moves into the pre-Christmas season, prices paid at the factories have commenced to recover, as competition for supplies has come to the aid of beef farmers hit by price cuts.

Within three weeks, most of the cattle required for the Christmas trade will be inside the factory gates, and processors are opting for an earlier rather than later build-up to meet their requirements, as insurance against a late surge of demand driving prices upwards.

With this objective in mind, they have conceded a little extra in the prices for this week, offering a base of 365 cents/kg in general for steers, and in some circumstances, they are willing to overlook some of the price penalties that might otherwise be applied.

While beef farmers welcome the expectation that the price slump has bottomed out, the target at the factories is to front load requirements without having to breach the 365 cents/kg base — so farmers trying to hold out for up to 370 cents/kg are meeting more than a little resistance.

The premium for heifers over steer prices has tightened a shade, with the quotes running at 370-375 cents/kg, and a sprinkle of farmers report deals for up to 380 cents/kg for heifers this week.

With a higher percentage of the supply in the over-age category at this time of the year, avoiding the penalty generally applied to over-age stock is being used by farmers as a bargaining issue with processors at the moment.

There has been no change in cow prices.

They range from 280 cents/kg to 305 cents/kg for O/P-grade, and up to 315 cents/kg for Rs.

The cattle supply to beef plants last week was 34,400, about 2,500 more than the same week last year.

Since the beginning of September, the average weekly kill has hovered around 3,500 head ahead of the corresponding weeks in 2015 — which is about what was expected, based on the statistics available.

The UK beef trade remained firm last week, with processor demand best for native-bred stock.

Prices for R4L-grade steers averaged equivalent to 448 cent/kg (when VAT is included, and with the euro making around 89p sterling; it fell to around 86p this week).

In France, there has been little change in the beef trade, described as poor in particular for imported product.

Retail promotions last week were centred mainly on domestically produced products such as steaks, ribs, burgers and mince.

In Italy, the market was reported to be remaining stagnant, with little change in wholesale prices.