Livestock Focus: Market awaits response to August price cuts
Beef processors have increased the pressure on cattle finishers this week by challenging any expectation they had of stable prices being maintained into the autumn, .
Miracles are rarely experienced in beef farming, and the seasonal norm of reducing prices to match the higher autumn supply appears to live on, with cuts across the board to coincide with the arrival of August, although there has been no surge in supply yet.
Most processors reduced their quoted base prices by around 5 cents/kg this week, breaching the €4/kg base for steers which had been steady over the past weeks, and thereby throwing down a price challenge to finishers.
The run of the base for steers this week is 395-400 cents/kg, with heifers at 405-410 cents/kg.
It’s a struggle to get to the higher end of these price ranges at most of the factories, with agents for some plants giving a “full for the week” reply. In view of that kind of response, it will be interesting to see how the intake this week compares with the steady 32,000 head or so of recent weeks.
Heavy rainfall over the past week in some areas probably helped processors by urging some finishers to lighten their stocking rates.
Last week’s kill showed little change from the prior weeks, at just under 31,800 head, the composition of which however showed some changes, with steers increasing by about 1,500 head to 14,500, while heifers were back by a few hundred head.
Meanwhile, there are indications that cold store stocks of beef are low, with the higher supply year-to-date moving on to the markets, which is positive for finishers.
Average prices paid last week for beef cattle were back slightly compared to prior weeks, indicating that the processors were securing a higher percentage of stock at the lower end of the price range.
This week, cow prices are steady at 300-340 cents/kg for O/P-grade and up to 355 cents/kg for Rs.
The beef trade in Britain remains steady, with good demand and relatively tight supplies of finished cattle.
R4L-grade steers have been averaging equivalent to 452 cent/kg (if VAT is included, and at 89p for the euro).
In France, the sluggish beef market continues, with trading back for most cuts, and an abundant supply of competitively priced domestic, German and Polish beef available.
But Irish Angus beef products such as ribs and skirts have been trading well.
In Italy, the beef market has eased due to lower consumption arising from recent hot weather.
Up to 510 cents/kg paid to secure lamb supplies
Lamb prices at factories continued to tumble this week.
Most processors quoted the lambs back to a base of 480 cents/kg on Monday, cutting 20-25 cents/kg off the price, while the remainder offered 490-500 cents/kg, at least for the opening days of the week, with the usual bonus of up to 10 cents/kg for quality.
However, the word from around the country is that processors have to pay up to 510 cents/kg in order to get supplies of lambs, with the size of that top-up varying in line with local supply and demand.
There was a very mixed trade at marts in the opening sales of the week on Monday, with reports varying from ‘steady’ to prices falling as much as €8/head, and with offerings of lambs at the sales all showing a big increase compared to recent weeks.
The supply increased to 660 head at Corrin Mart, where prices held up well, with butchers paying €52 over to €74 over, and the factory lots selling for up to €62 over.
The entry was also increased on Monday at Kilkenny Mart, where there were 900 head on offer, and prices were back by €3-€8/head from last week.
Butchers lambs sold for up to €59 over and factory lots peaked at €54 over.
In Britain, little change was reported in the trade over the past week, with supplies remaining relatively strong, and exchange rate fluctuations helping the export trade. Lambs were making the equivalent of around 458 cents/kg.
In France, Grade 1 Irish lamb made 562 cents/kg (including VAT) during the past week.
Farmers surprised by cut in pig prices
Pig farmers got something of a shock last Friday in the form of some processors quoting 4-6c/kg less for pigs.
Various explanations were given by procurement managers for reduced quotes, but IFA Pigs Committee Chairman Tom Hogan said that there was little justification.
“The European market had forged well ahead of the Irish price over the summer and eased slightly in recent weeks. A number of processors had taken this as an excuse to follow suit.”
Up to 174c/kg is now quoted at Irish export plants.
Meanwhile, UK prices and EU mainland prices were unchanged last week.
But in the four weeks ending July 23, the EU pig reference price had fallen by €6.72 to €170.25/100kg, its lowest level since mid-April.
EU pig prices often level off in the summer holiday period and dip in September, but the earlier 2017 pig price decline may indicate a shift in the market. It could be due to Chinese imports falling by around one third since the end of March, compared to a year earlier, the first time since the end of 2014 that quarterly imports did not increase year-on-year.
