Cattle supplies higher but prices stay the same

Cattle supplies to the factories have continued much higher than had been expected over the past week, to the expense of producers, with very little movement in prices.

Changes in the quoted prices for this week show very little change from recent weeks with nothing more than a marginal increase at the upper end of the range on offer to producers.

Base prices for steers are quoted at 395-405 cents/kg (141p-145p/lb). While some of the factories are maintaining that they are getting steers in the south at 395 cents/kg the more general run is 400-405 cents/kg for this week and some producers with quality stock are getting a shade more.

Heifer prices are a shade stronger than the steers and generally at a premium of 20 cents/kg over the males this week.

The strong intake at the factories has continued to undermine the ability of producers to negotiate higher prices. Last week’s kill, at around 32,650 head was only slightly lower than the previous week. Last week’s intake was almost 5,000 head higher than the same week in 2011.

While the processors remain anxious for stock this week they appear not to be coming under any real pressure to maintain intake and therefore are reluctant to concede higher prices unless it becomes absolutely necessary to meet intake requirements.

All the processors are expected to operate for a full five days this week and a number of them are slaughtering on Monday (Christmas Eve) to ensure sufficient to supply orders over the festive days.

The first three weeks of December is now on target to set the highest average weekly intake for the year which is set for the history books as one of the unusual features of the 2012 trade.

It is now obvious that producers had targeted finishing larger numbers for the pre-Christmas trade in anticipation of tighter supplies. While it had appeared to have been a reasonable bet with the predictions last Autumn, the much stronger than expected trend in that direction has acted against the interest of the producers.

The outcome has also been very damaging in building confidence among producers that they will be rewarded for higher production in the future with the glaring difference in the UK versus Irish returns for the stock over the past two months.

The trade in the UK has continued similar to previous weeks, with demand remaining firm.

Steak cuts are reported to be showing a strong demand, although trade for round cuts remains slower than usual.

Prices eased during the past week, with R4L grade steers averaging Stg 362.3 pence/kgted which was equivalent to 469 cent/kg (167p/lb).

On the Continent, trade has firmed across most of the key markets, with prices reflecting this pattern.

Trade is being helped by increased activity in the run up to Christmas.

There is no change in the prices being offered for cows at the Irish factories where O/P grade cows are ranging 305-345 cents/kg and R grades up to 370 cents/kg.


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