The beef trade at factories has become tougher this week with finishers finding it harder to secure the prices of recent weeks for their cattle, as processors “dig in”.
Late July and early August usually sees processors trying to shape the trade to their advantage for the increased autumn throughput, a process made harder for them this year by strong demand for beef restricting their scope to adjust prices.
Over the past 10 days or so, processors were showing signs of concern that the trade could overheat.
But with apparent demand for all the stock they could get their hands on, it was very difficult for them to pull prices.
Steers are still being quoted for on a general base price of 370 cents/kg this week, and factory agents appear to be under direction to stick as close as possible to that target.
Some stock had been bought forward from last week on a base of 375 cents/kg.
There’s a clear signal from processors that they are tightening up on prices.
Prices for heifers are also being quoted at a base of 370 cents/kg this week by a number of processors, with an overall price range quoted of 370-375 cents/kg.
It’s a bit easier to get a few cents more for heifers, than for steers.
Demand is still strong for Angus and Hereford crosses, with a breed premium of 15-20 cents/kg strengthening the returns.
While the number of young bulls being slaughtered continues well below last year’s level, prices have tightened further, in line with the steer price trend.
R-grade young bulls are generally quoted for at 360 cents/kg, with up to 365 cents/kg being paid, and O-grade ranging from 340 to 350 cents/kg.
The cow trade appears to be the one category not subject to downward price pressure this week.
The best of the R-grade cows are making up to 330 cents/kg, with prices ranging from 320 cents/kg upwards.
O-grades are worth 300-310 cents/kg, and P-grades are making 290-300 cents/kg.
The kill last week of 35,267 is more than 5,000 higher than 12 months previously, but is not comparable because the 2019 week included the bank holiday. There was a strong supply of steers last week at 16,500 head, with 9,346 heifers and 7,019 cows.
The intake of young bulls, with only 1,577 last week, continues well behind last year.
Despite a 3% decrease in throughput for the first 30 weeks of 2020, cattle throughput is expected by Bord Bia to remain tight.
The 1,012,207 animals processed up to the week ending July 26 was 31,382 behind the corresponding period in 2019.