Factories anxious not to pay more than necessary for cattle

For Farming Examiner. Pictured at the sale in Corrin Mart, Fermoy are two Angus cross bullocks born February '19 & average weight 651 kilos which made €1,370 each. Photo O'Gorman Photography

The processors continue to have an appetite for whatever cattle are available, but they are not anxious to have to pay more than the current prices for them to fill the pre-Christmas orders.

These are crucial weeks for all of the processors to ensure that a steady flow of cattle continues to flow through their gates to meet orders for one of their busiest periods of the year.

The markets for beef are particularly strong this year with good consumer demand from both supermarkets and export markets, while the supply of cattle is back on 2020.

Currently, both the producers and processors are walking a tight line. Neither are keen to concede any ground on price and so it is largely a “steady as she goes” situation continuing at the factories.

The quoted prices are unchanged. Steers continue to be quoted at a base of 415c/kg. In general, very little more is available, except for large supplies or where a particular processing centre is under pressure to get the stock.

Heifers are on a base of 420c/kg. There is some latitude to get a few cents per kilo more for heifers in deals with the factories, but generally the processors are trying to hold fort on the price as much as possible, to guard against any overheating of the trade at a crucial time.

Adding in the quality assurance bonus payment, the return to producers is leaving a better margin than for many years, while those with Angus or Hereford cross animals can qualify for the additional breed bonus, all adding up to a good return this year.

The combination of tighter supply, coupled with strong market demand has moved the balance pendulum in favour of the producers enough to keep pressure on the processor against their usual seasonal price reduction for the autumn months.

The young bulls are continuing on price parity with the steers on a base of 415c/kg for R grade, while R grade cows are maintaining at 385c/kg.

Year-to-date intake at the factories is down by over 72,000 head on the same period in 2020 and currently running at around 2,000 head/week behind last year. It now looks that supply for the year will be back in the region of 82,000-84,000 head which is considerably less than had been predicted.

The supply for last week slipped to 36,870 head, which was 1,800 fewer than in 2020. All categories, with the exception of the young bulls, were down on last year. The young bulls were almost 500 head higher than in 2020 and may be balancing out for the drop in steers.

The year to date figures show a decline in all categories.

The biggest drop has been in the supply of heifers which is down by 29,000 on last year. The steers and young bulls are both lower by 11,000 head each, while intake of bulls has dropped by 6,000 head.

Fewer cows were also supplied for the year, with the intake dropping by 10,000 head reflecting the decline in the suckler sector and fewer cows being culled in the dairy herds than in previous years.

At the same time, it is likely that more steers and heifers were supplied at younger ages to take advantage of the stronger prices over the autumn months of this year, which can have a carry-over effect on supplies in 2022.