Processors concede another 5 cents/kg to beef finishers

Beef market report

This 2014-born Belgian Blue cow weighing 855kgs sold for €2,790 (€3.26/kg) at Ennis Mart last week.

We are approaching the time of the year when beef processors usually have to work a bit harder to get sufficient supply through the gates to meet market requirements.

That means it is also the season when beef finishers are in the strongest position to negotiate on price, before parting with the livestock.

Some aspects of the beef business have a habit of repeating themselves, no matter how other things change, and the late spring price battle between factories and farmers has become a very regular occurrence.

Processors are loudly defending the prices they are paying, but finishers are gaining better control over the supply of stock that processors want.

That’s why processors have conceded another 5 cents/kg to finishers across most of the cattle categories this week, under pressure to keep the supply flowing, as beef cattle number remain well below the level of recent years, and markets continue strong.

For the first 12 weeks of 2021, the steer throughput was back 8.3% and the heifer throughput back 14%, compared to 2020.

Most of the steers are now priced at a base of 385 cents/kg.

Some hard-sell finishers are holding out for a base of 390 cents/kg. It is hard got, and the factories are very reluctant to concede, but there are some reports that it is being achieved.

Prices for heifers are at a base of 390 cents/kg.

The pattern of trade is similar to that of the steers, with some finishers reporting that up to 395 cents/kg is being attained.

The weeks of the year when supplies are normally tightest are fast approaching, and processors are aware of that, and are getting in early warnings that there is nothing more from the market to give.

Only time will prove if their approach is sustainable, and they can continue to secure sufficient stock without having to pay more for them.

Strong demand continues for both Angus and Hereford crosses, with a breed bonus of up to 15 cents/kg on top of the quality assured bonus adding a tidy sum to the cheque from the factory.

There is demand for young bulls this week at up to 380-385 cents/kg for R-grade.

The price for R-grade cows has increased to 350 cents/kg, with strong demand at factories for cows, despite the continuing lockdown of the food catering sector, and probably more a reflection of the overall strength of the markets for all categories of beef.

The total intake at beef plants for last week was unchanged at 31,124 head which was 4,500 head lower than the same week in 2020.

There were 11,696 steers, 9,525 heifers, 2,245 young bulls and 6,185 cows, with each of these categories down compared to the corresponding week last year.

For the first 12 weeks of 2021, the number of animals exported is running 3% behind the same period in 2020, with 85,703 head exported. But calf exports were 10% lower this year.