Processors wary of free-for-all on prices as prime beef supply falls 10%

Beef market report
Processors wary of free-for-all on prices as prime beef supply falls 10%

At Skibbereen mart last Friday, this Charolais cow born 2015 weighed 795kg and sold for €1,840.

Processors held their ground this week, resisting finisher demands for price increases.

While there are some slight variations in prices for beef cattle around the country, the overall trade is more or less steady at recent weeks’ prices.

That said, processors are finding it very hard to get steers for less than the base of 410c/kg which seems to be their upper limit in their negotiations with most finishers.

The only exception is likely to be when processors push the base to 415c/kg for their best finisher suppliers, especially if a large number of cattle are involved, and the factory is under pressure to get sufficient cattle locally.

The price pattern is very similar for heifers, for which the base is generally set at 415c/kg, but with a few lots reported to have traded at 5c/kg more.

Strong demand continues for both Hereford and Angus, for which the breed bonus and quality assurance bonus add a worthwhile boost in the farmer’s cheque. The marketing job which both of these breeds have done over the past decade is a lesson to all on how to achieve a good consumer product and promote it well. Continued success to them; they are both delivering for their finishers.

With the throughput at the factories having dropped to under 30,000 head in recent weeks, and the supply of prime beef cattle 9.6% lower than 2020 in recent weeks, there is pressure to source sufficient to fill the orders, but the processors are, and will likely to continue to be, on guard against any spiralling in the prices.

With delayed grass growth, it is unlikely that cattle will come off grass before mid-June.

Until then, the supply will remain tight, even tighter than it is now, so a free-for-all on prices is the last thing processors want to see.

Prices for young bulls are hovering around 405c/kg for R-grade animals, with the throughput of young bulls remaining relatively low.

Prices for cows have continued to strengthen.

The best R-grade cows are now making up to 380c/kg, getting nearer to the prime beef price.

The total intake for last week was little changed, at 28,319 head, which was around 2,500 more than the corresponding week in 2020.

There were 10,099 steers, 8,056 heifers, 2,421 young bulls, and 6,984 cows.

For the first 16 weeks of 2021, the number of animals exported live has moved ahead of the same period 12 months ago by 3%, to 130,329 head.

Although calf exports are down 4%, the movement of cattle to Northern Ireland is running 125% higher, and live exports to the North for direct slaughter are expected to remain strong due to the big price gap.

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