Beef prices at the factories are coming under more pressure this week, as processors bid to cut returns to finishers.
While market demand for beef continues very strong, and processors have been handling larger throughputs than ever for this time of the year, it is clear that processors want to pull back the prices being paid.
The initial target of the factory bosses is to cut prices by 5 cents/kg for all prime beef cattle. Processors want to shape the trade for the big autumn kill in their favour, a process which they usually initiate from early August.
Many of them have reduced the quoted base price for steers to 365 cents/kg this week.
Most of the stock purchased forward last week were bought on a price base of 370 cents/kg.
But the intention is that cattle purchased this week are coming in as close as possible to 365 cents/kg.
However, some deals with processors are continuing this week for a base of 370 cents/kg for steers, but this is clearly getting much harder to achieve, with processors determined to tighten up on the payout.
Nevertheless, there are a few reports of 375 cents/kg being agreed, where there is extra market pressure on processors to get beef cattle.
The situation with the heifer trade is similar.
Most processors offer a base of 370 cents/kg this week, but deals returning 375 cents/kg are being achieved, and there are a few reports of up to 380 cents/kg.
Prices for young bulls trail the steer price, at a deficit of 5-15 cents/kg, with R-grade being quoted for at 350-360 cents/kg.
The young bull intake at factories continues well behind the 2019 level.
While the trade for cows has eased a shade, there is still good demand and the throughput continues strong.
Better quality R-grade cows are still worth up to 320 cents/kg, while O-grade make ing up to 305 cents/kg and, in some deals, 310 cents/kg is being paid.
The Ps, depending on quality, can range from 285 to 295 cent/kg.
After excellent grass growth since early June, cattle weights and kill outs are satisfactory, which is some compensation to finishers for relatively low prices.
The intake for last week slipped to 31,838 head, still a strong kill for the shorter bank holiday week.
There were 14,941 steers and 8,742 heifers. T
Cows accounted for 6,121, and the kill included 1,386 young bulls.