Factories cut beef quotes by 10c/kg despite tight supplies

Suppliers had expected the shorter working week, following the June bank holiday on Monday, would put more pressure on processors to fill their requirements, but it has not materialised on the ground

Processors are attributing the cut in prices this week to a weakening of consumer demand on the markets as the cause of the downward price pressure.

Beef processors have moved to exert further pressure on prices and confirm to producers the perception of tighter supplies as a formula for higher returns is not a reliable expectation.

Several of the factories have reduced their base quotes for both steers and heifers being booked in this week by up to 10c/kg, despite the tightening in supply over recent weeks and reports of demand on export markets remaining firm.

Supplies for delivery this week, which were booked in last week, are at the higher prices which prevailed for last week's kill.

Steers are generally being quoted on a base of 740c/kg this week, with suppliers reporting it was very difficult to get last week's base of 750c/kg at the factories.

It is a similar trend for the heifers, for which the base quotes have been reduced to 750c/kg, and deals at last week's base of 760c/kg are reported to be "very hard to get" for supplies this week.

Suppliers had expected the shorter working week, following the June bank holiday on Monday last, would put more pressure on processors to fill their requirements, but it hasn't materialised on the ground.

Dashed too, have been the predictions of prices holding firm for at least a few more weeks until the supply of grass-finished animals increased.

Processors are attributing the cut in prices this week to a weakening of consumer demand on the markets as the cause of the downward price pressure.

One supplier summed up the feeling as "a downturn that we didn't anticipate so soon".

"We were being told all this year by the experts that the supply of finished cattle for the year would be well down and that markets are continuing strong, which should see prices holding up," they said.

"What we are now seeing is just proving that the age-old belief that the only certainty in the cattle trade is uncertainty is still as relevant as ever," they added.

Cow prices have also tightened to about 720c/kg for R-grade this week, and R-grade young bulls are ranging 740–750c/kg.