Beef prices plateau as factory supplies increase
Numbers are flowing into the factories a shade easier, with an increase of 2,500 head last week pushing supply to 3,000 head more than the same week last year.
Beef prices at the factories are a bit like the weather, showing an easing of the temperature for this week following the sudden and very welcome boost which has benefited both over the past two weeks.
Numbers are flowing into the factories a shade easier, with an increase of 2,500 head last week pushing supply to 3,000 head more than the same week last year.
While the drop in temperature and the possibility of some more moisture will benefit the recovery of grass growth on livestock farms, any reversal of the boost in beef prices at the factories will not be welcomed by finishers.
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“It’s only more of a plateau for the beef prices,” was the optimistic view of one supplier in response to the processors applying the brakes to the upward movement in prices for this week.
Another said: “The factories paid good money for cattle over the past two weeks because they were under pressure to get sufficient supplies, but it would be foolhardy to think that they are going to continue that because there is likely to be an easing of the pressure on supplies as the season moves on, and holding on to the current prices could become more of a challenge into August.”
The consensus of opinion is that, overall, processors have tightened on paying the higher ‘top-up’ extras. However, they are unlikely to try a clawback of the recent gains for producers in the short term, fearful of the possible consequences for intake, but it will remain an interesting space to watch over the coming weeks.
Steers are operating this week on a base of 650–660c/kg. Factories in the south of the country held tightly to pay a base of 650c/kg last week, and they appear to have firmed their stance at that level for this week.
Upcountry, where prices continued to harden through last week, most suppliers are reported to be holding out for a base of 660c/kg, with deals for a few cents/kg more reported between the factories and hard sellers. Those with larger numbers to offer are in a more advantageous position to negotiate for the higher prices this week.
It is a broadly similar pattern of trade for heifers, on a general base of 660c/kg in the south of the country and higher by at least 10c/kg in the midlands and above.
Cow prices appear to be a shade tighter, at around 640c/kg for Rs this week, while R-grade young bulls continue to move at 670–675c/kg.
Intake last week increased to 26,938 head, including 9,543 steers, 7,376 heifers, 7,689 cows and 1,751 young bulls.
