Fat cattle at €70-80 per head behind peak prices

There has been further downward pressure on prices at beef factories for this week.

Intake edged up slightly in recent weeks, and cattle farmers accused processors of taking advantage of the difficult weather conditions on farms to reduce prices, despite supplies remaining at historically low levels.

Quoted prices for this week have eased by 3-5 cent/kg (1p-2p/lb) for steers and heifers, and farmers are feeling the pinch after paying very high prices for forward stores, which have performed poorly on many farms due to bad weather.

Base prices for steers are being quoted at 390-400 cent/kg (139p-143p/lb), and factory procurement managers and agents are under pressure not to pay more than 400 cent/kg for steers this week.

Heifer prices on offer — and the actual prices being paid — are staying 10 cent/kg (4p/lb) ahead of steer prices.

Returns to farmers are now €70-80/head behind this year’s peak prices, and unless there is very orderly marketing of finished cattle for the autumn, processors will have scope to inflict further price reductions during the peak supply period in September and October.

Last week’s intake was a few short of 25,000 head, which was on par with the previous week. Year-to-date intake has reached 800,000 head, about 138,000 head less than for the same period in 2011, a drop of 15% overall, and supply is expected to remain tight for the balance of the year, which should benefit farmers, if the flow of numbers is controlled.

The average price paid last week was back by almost 2 cent/kg for the steers, and slightly less for the heifers.

The trade for cows has also eased. Base prices for O/P grade cows ranged from 320 to 365 cent/kg (114p-130p/lb). Demand is still firm for heavy quality carcases, for which up to 375 cent/kg is attainable. The intake of cows remains strong, but the demand for manufacturing beef has been very solid all season.

The beef trade in the UK was unchanged last week, with tight supplies matching the sluggish demand. Weak demand for the manufacturing beef continued to persist. Prices for R4L grade steers averaged equivalent to 465 cent/kg (166p/lb) including VAT.

On the Continent, the trade across most key markets was a shade firmer, which reflected tightening supplies across most of the key markets.


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