Supplies tighten but no improvement in prices

It is more of the same for most farmers selling finished cattle to the factories this week, after further tightening in the supply failed to deliver any overall improvement in the prices on offer.

There are some minor exceptions to the overall unchanged pattern of the trade, with a sprinkle of farmers reporting deals at higher than average prices — but they are few and far between.

Approaching June, farmers could not be blamed for expecting a price rise, but the processors are maintaining their rein on prices this season as rarely before, despite tight supply — a cause for farmer concern about what would happen if the intake of cattle significantly increases later in the season.

Steer base prices are quoted at 405-410 cent/kg (144p-146p/lb) across most of the plants, with a sprinkling of 415 cent (148p/lb) at the top.

But very few farmers are parting with their cattle at the lower end of that price range, and the general run is 410-415 cent, with some negotiating up to 420 cent.

The price premium for heifers over steers has widened to 15 cent. There is good demand for heifers, and most lots are being sold at 425-430 cent (152-154p/lb).

The cattle intake last week slipped to just under 24,000 head, compared to over 30,000 for the same week in 2011, and on the face of it would be reasonable to expect a 20% drop in supply to have a greater impact on prices.

After an excellent run of prices for the year to date, the cow trade is showing signs of weakening a shade this week at the factories.

The supply has been very strong, at over 6,000 per week going through. Base prices for O/P grade cows range from 355 to 375 cent/kg (126p-134p/lb), and the better quality R-grade cows are making up to 390 cent.

The beef trade in the UK is being affected by ongoing tight supply.

Cattle prices have increased slightly, with R4L-grade steers averaging equivalent to 453 cent/kg (162p/lb), including VAT.

On the Continent, trade across most of the key markets is reported to be holding steady, in response to price promotions being used to help shift any surplus stocks.


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