Beef market report: Surprise cut of at least 5 cents/kg in beef prices

BeefmarketreportMay14_large.jpg

Beef prices at the factories have weakened by at least 5 cents/kg this week, defying farmer expectations, and the cattle supply trend.

The abrupt reversal in a recent brief upward movement in prices for both steers and heifers at the factories has been aided by deterioration in the weather since the beginning of the month.

Rainfall hitting two to four times the normal level around the country in the past week led to water-logged ground conditions, while poor growth has tightened the grass supply.

Quoted prices for steers have eased to 405-410 cents/kg. Most farmers are trying to secure at least 410 cents/kg, and some are doing deals for up to 415 cents/kg, which is more achievable up country than at plants in the southern counties, where cattle supplies are generally more plentiful.

Heifer prices are generally at a premium of 10 cents/kg over steer prices.

Demand for heifers is generally stronger than for the steers, and some farmers are negotiating a premium of up to 15 cents/kg on the heifer prices at the top of the trade this week.

In contrast, cow prices have retained most of the gains made over the past month, which is usually a good omen for prime beef prices going forward.

Base prices on offer for O/P-grade cows range from 350 to 365 cents/kg, and up to 380 cents/kg for Rs this week.

Some deals for better quality cows at up to 385 cents/kg are reported from around the country.

Once again, the bank holiday last week impacted on the supply, which eased back to just under 28,800 head for the week, which was about 800 less than for the same week last year.

Some recovery in the supply is expected this week, as factories return to a full week’s trading, but overall supplies are tightening slowly — but this is not reflected in the price trend.

The ability of processors to cut prices while the intake tightens — as they have succeeded in doing for the second consecutive week — must be of serious concern to cattle farmers who believed that tighter supplies of cattle will deliver stronger returns in 2015.

In Britain, steers are averaging equivalent to 495 cent/kg (including VAT).

The trade was relatively unchanged on the back of steady demand for most cuts, with topside cuts reporting to be performing best.

In France, little change is reported in the beef trade, with promotions centred on roasts, steak cuts and diced beef.

In Italy, the trade continues to remain slow on the back of sluggish demand and increased supply.


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