Processors under pressure as finished cattle numbers fall 25%

Demand for the more expensive cuts of beef has dropped off significantly both within the restaurant and general catering sectors and in supermarket purchases following the sharp increase in price over the past 18 months.

A 25% drop-off in the weekly supply of finished cattle at the factories is mounting pressure on the processing sector ahead of their busiest and usually most profitable season of the year.

Intake for last week dropped by 2,500 head on the previous week, with the weekly deficit compared to 2024 increasing to more than 13,400 head — the highest weekly decline year to date.

Balancing supply and demand at the least cost, always a primary objective for the processors, is becoming the most challenging in years due to the fall-off in supply.

The consequence is that the factories are having to concede a few cents more for the second consecutive week to secure sufficient intake, reversing the downward trend applied during September.

Base prices on offer for the main categories have been increased by a further 3-5c/kg, and reports indicate the factories under the greatest pressure are paying at least 10c/kg more to larger suppliers to get sufficient cattle.

The general base quote for steers this week is 720c/kg, with reports of deals at up to 730c/kg. Heifers are on a base of 730c/kg in general, with 5-10c/kg more going to suppliers with larger numbers.

Demand is equally strong for cows, with R-grade making about 710c/kg and young bulls at about 730c/kg for R-grade.

It is understood the processors have been drawing more cattle from their owned or controlled feedlots to replenish the shortage of intake over recent weeks.

The historically low weekly intake over recent months — down up to 10,000 head/week on recent years — has depleted factory stocks of beef. As it approaches a peak season for demand, the necessity to build up stocks is becoming more critical each week.

The challenge facing the processors is to rebuild their stocks at the least cost because there is growing awareness of customer resistance to further increases in beef prices at retail level, which is hitting purchasing volumes.

Demand for the more expensive cuts of beef has dropped off significantly both within the restaurant and general catering sectors and in supermarket purchases following the sharp increase in price over the past 18 months.

Intake for last week declined to 27,415 head, which includes 13,312 steers, 7,356 heifers, 5,311 cows, and 1,009 young bulls. The intake compares to 40,956 head for the same week last year, with declines across all the principal categories.