Base prices rise up to 10 cents/kg as beef processors feel the pressure

There are some reports of a few cents/kg more being secured, particularly for heifers

The stock is needed to replenish a beef market that is demanding more Irish supply.

Beef finishers can't be blamed this week for feeling a bit like the country's shoppers being lectured by a supermarket group telling them that "every little helps" as a means of soliciting their custom at the check-out till.

Beef processors have decided to offer their suppliers of stock a little more to encourage them to part with their finished animals sooner rather than later.

The reason for the loosening of their grip on the prices being offered by 5-10 cents/kg for steers and heifers is that the stock is needed to replenish a beef market that is demanding more Irish supply.

It has to be hailed as a very positive situation for the finishers, that their cattle are required by the markets which the processors have secured but equally important that the producers get a fair cut of the returns from those markets.

The processors trying to keep intake on balance with requirements is regularly the catalyst that producers have to rely upon as a price maker, which is so crucial for them to balance their books.

And so it is that the base price for both steers and heifers has increased by 5 cents/kg in general and up to 10 cents/kg in hard-selling for this week as the processors are feeling more pressure to keep the intake up.

"The supply of cattle to the factories tightened last week and they realised that they were going to be under more pressure to get sufficient with a couple of short weeks approaching so they decided to up the price to halt the decline," was one producer's summary.

Most of the steers are on a base of 505 cents/kg with a lesser percentage of the supply costing the processors a base of 510 cents/kg. Heifers are following a similar pattern at 510-515 cents/kg.

There are some reports of a few cents/kg more being secured particularly for the heifers, but the processors are acting very cautiously against allowing the impression of a 'run away' on prices, which could cost them.

The cow prices have hardened to 460 cents/kg for R grade, while the young bulls retain a premium of up to 10 cents/kg over the equivalent steer grade.

The intake for last week was back by 2,600 head on the previous week at 36,883 which was the lowest for a full working week since mid-January.

The jury is out as to whether it is the first signs of a tightening in available supplies of finished cattle or a holding back reaction by producers as a reaction to the cuts in prices. 

The decline was reflected across all the main sections. Week-on-week heifers were back by 1,300 head, the cows were down by 600 head and steers declined by 500 head.

The kill included 12,838 steers, 9,788 heifers, 8,825 cows and 2,254 young bulls.