Processors slash quotes to a seasonal low, with reductions of 10c to 20c/kg

Finishers are being offered a base of 720c/kg in general by the processors for steers this week.

Any early optimism of a pre-Christmas trade for beef animals at the factories delivering a decent end-of-year boost to the finishers has been totally dashed.

The hope of strong demand for a tighter supply creating such competition for stock as to return a pre-Christmas bonus to the cattlemen has melted to a seasonal low instead, as the processors exercise their complete control of the market.

The prime beef prices at the factories have been reduced by 10-20c/kg for this week's bookings, as the quotes on offer are slashed to a seasonal low, in sharp contrast to the strong expectations.

Finishers are being offered a base of 720c/kg in general by the processors for steers this week. Animals were bought forward last week at 730-740c/kg to be slaughtered this week, but the 'freeze' at the lower price has been the order of the trade since Monday.

It is a similar situation for the heifers. They are being quoted on the grid at 730c/kg at most of the factories, and getting above it is a battle few suppliers are having any success with.

The cow prices have slipped again to range 670-675c/kg for R grade this week, while the R grade young bulls are on 730-735c/kg.

"The factories have been getting around 32,000 head/week for the past few weeks. Although that is about 8,000 head/week lower than past years, they are showing no pressure to force competition between the factories to pay higher prices to get extra," is a summary of the view among the disappointed finishers this week.

It is a few weeks since "control" was mentioned as the new environment within which the processors were appearing to have adapted to operate. It implies a combination of adjusting their throughput operations to handle the lower intake and streamlining their sales contracts accordingly.

The aim is to diffuse all-out competition between factories battling for scarce cattle, driving the prices to an "unsustainable" level that supermarket consumers would reject.

One processor source explained: "It didn't matter if we paid €10/kg for cattle, they [the cattle numbers] were not there at the level of past years, and we'd be only beating the trade into collapse, because the customers are not there to pay that price for beef"