Throughput at the factories remains seasonally well below normal

'They [the factories] know the numbers are going to increase in September and October, even if the weekly intake is still well down on last year.'

A continuing steady trade for beef animals with the throughput at the factories remaining seasonally well below normal is a summary of the sector this week.

Any movement on the prices is small, but on a positive perspective on the side of the producers, while the processors maintain a firm grip on control of upward movement.

The general base quoted for steers is 750-755 cents/kg with reports that up to 760 cents/kg is being secured by some suppliers, particularly for larger numbers of animals.

It is a broadly similar pattern of trade for heifers. They are working off a base quote in general at 760-765 cents/kg and up to 770 cents/kg to be got in harder selling for good quality.

Purchases on the grid aside, there are increasing reports of more of the factory intake being purchased on fixed flat prices this week, with disregard for over 30-month animals in the mix.

Suppliers are reporting up to €8/kg 'flat' is being paid, particularly in areas of the west, to get heifers this week, which, if confirmed, would signal a possible better return to suppliers, by at least 10 cents/kg, compared to the grid purchases.

One source explained: "The factories are tight on conceding a higher base price, but the 'flat' option gives them more control to pay it in the short term to get some extra stock and pull it back again very quickly without creating a revolt by their suppliers."

He pointed out 'flat' pricing was not uncommon at times of scarcity of stock and it could benefit the suppliers with more certainty on their return, without the grid factor and penalties for overage, but the processors always want to get back to buying on the 'grid' as quickly as possible.

"They [the factories] know the numbers are going to increase in September and October, even if the weekly intake is still well down on last year, and they can pull the 'flat' pricing again at a whim and return to on the grid' only," he added.

There is continuing strong demand for cows with throughput year to date down by 40,349 head and R grade are making 730-740 cents/kg at the factories this week. The young bulls are ranging 760-765 cents/kg for R grade.

There was an increase of about 700 head in the supply last week, with intake rising to 26,268 head while down from just over 33,000 head for the same week last year.

Last week's intake included 11,680 steers, 7,499 heifers, 5,199 cows and 1,410 young bulls. All main categories were lower than last year. The exception was the young bulls, which were slightly higher on a low base.