Tight cattle supplies drives factory competition
Processors are coming under severe pressure to compete for the available supplies and are being forced to lift prices by 5–10c/kg week-on-week.
Beef prices at the factories are continuing to increase week-on-week, driven by demand far exceeding the supply of finished animals available to meet market demand.
Analysis of factory prices being paid, as reported weekly by the Department of Agriculture, reveals a widening difference of up to 40c/kg between factories for similar-grade animals in recent weeks.
It can add up to in excess of €3,000 on the return to the supplier for a typical load of cattle, indicating how demand and competition for stock are driving the trade.
Processors are coming under severe pressure to compete for the available supplies and are being forced to lift prices by 5–10c/kg week-on-week.
With most plants described as “hungry for cattle”, finishers with larger numbers of higher-grading steers and heifers are now targeting all-in flat price deals at up to €8/kg as achievable.
With the 20–30c/kg breed bonus included, most suppliers of Angus and Hereford cattle are already securing returns at €8/kg or above, with reports of deals for Angus at up to 825c/kg becoming more common.
The general run of steers being bought on the grid this week is at a base of 750c/kg, with deals of up to 760c/kg increasing. Base prices for heifers on the grid are ranging 760–770c/kg, with some deals at up to 780c/kg being mentioned.
“The factory agents are under a lot of pressure to get cattle numbers, and some are willing to engage in all sorts of add-on extras to close a deal, so it is becoming more difficult to know exactly what cattle are costing the factories,” explained one supplier.
“The intake at the factories is down 10,000–12,000 head/week, and that is hurting the processors. They were not prepared for it, and their plan now seems to be an acceptance that they are having to pay more — but only the minimum extra — and they’ll keep it as tight as possible,” they added.
Demand continues strong for cows. The R-grade cows are making up to 740c/kg this week, while R-grade young bulls are hitting 750c/kg.
The supply for last week came to 29,934 head, an increase of 1,800 on the previous week, and the third consecutive week of stronger supply. Nonetheless, the kill for the week was 10,000 head lower than the corresponding week last year.
Last week's supply included 12,847 steers, 9,037 heifers, 6,396 cows and 1,249 young bulls.
The year-to-date position continues to worsen. Compared to the same period last year, up to the third week of October, supply year to date is back by 159,385 head on 2024.
