Beef prices have come under further pressure at factories this week, in a continuation of the downward slide in returns to farmers.
Quoted prices for steers and heifers have been reduced by 5-8 cent/kg, and factory agents are adopting a tougher approach to conceding top-ups on quoted prices.
Farm conditions, due to continued heavy rainfall, are helping processors, as pressure increases on finishers to ease stocking levels and to reduce poaching, by disposing of the heavier cattle. They also have to conserve scarce winter feed supplies.
Base prices for steers are quoted at 380-390 cent/kg (136p-139p/lb) and it is very difficult this week to negotiate more than 390 cent/kg at factories. Most sales are being made at 385-390 cent/kg.
Heifer prices are quoted at 10-15 cent/kg higher than for steers, as are actual prices being paid, meaning that the premium on females has improved as much as 5 cent/kg, while the base price continues to slide. Actual prices paid last week declined for both steers and heifers (see figures on the left) — bad news for finishers who purchased forward stores at very high prices.
Intake at factories continues to increase, although trailing 2011 by 15% to 20%. Last week, the kill was just short of 26,000 head. The supply normally continues to increase seasonally over the coming weeks, but the difference this year is the forecast of lower overall supply.
The cow trade is also under more pressure at factories this week, with prices dropping sharply. Base price quotes for O/P grade cows have eased to 310-340 cent/kg for the general run, while the quality R-grade cows, for which there is continued strong demand, are making up to 365 cent/kg.
The trade in the UK over the past week is reported similar to previous weeks, with tight supply matching current demand levels.
Prices have firmed, with R4L-grade steers averaging equivalent to 468 cent/kg (167p/lb), including VAT.
On the Continent, trade across most of the key markets has firmed, reflecting tightening supply.
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