Beef market report: Brexit takes blame for €70-75/head beef price slump

Fallout from Britain’s referendum decision to leave the EU has continued to hit prices for beef animals at the factories.

Imposing a further cut of as much as 10 cents/kg in the prices offered for both steers and heifers this week, the processors are laying the blame on the fall in the value of sterling compared to the euro.

The base price generally being quoted for steers has slipped to 390 cents/kg.

In areas where the intake is tight, some processors are paying a few cents more to get cattle, but most are trying to stick to the quoted price.

The base for heifers has dropped to 400 cents/kg in general, but price reports indicate that some processors who need extra cattle are willing to pay up to 405 cents/kg this week.

In general, cow prices are being quoted at 290-305 cents/kg for O/P-grades, and up to 325 cents is being offered for Rs.

Beef farmers are holding their breath in the hope that the worst of the Brexit fall out is over, and prices will stabilise in the short term at least, having slipped back by €70-€75/head, on average, over two weeks.

Prospects of recovering any of that downturn in prices would be over-optimistic, given the timing and the season of the year, with the rising intake of cattle at factories likely to favour the processors in setting prices for the months ahead.

The intake at the factories for last week was just shy of 31,400 head, which was almost identical to the previous week.

The steer supply was strong, at around 11,400 head, and heifers and cows each added 7,500 head, while the intake of young bulls came to around 4,600 head.

Because of the price cut, some farmers have held back cattle which they had planned to kill this week. It will be interesting to see if that reaction becomes more widespread.

A slightly more positive tone to the beef trade in Britain over the past week was attributed mainly to tighter supplies.

The beef cattle trade has improved in the UK, with last week’s average R3 steer price of 333.7p/kg, increased by 1.9p/kg from the previous week, and the highest weekly price since early March.

The average price for R4L-grade steers and heifers was about 337p.

In our euro terms, the British steer price is now equivalent to around 426 cents/kg (including VAT). Following the Brexit referendum the euro-sterling exchange rate has fluctuated from 77p to 83p, and a weaker sterling is making UK exports more competitive in the Eurozone.

In France, the beef market has remained unchanged, with continuing difficulties getting imported product into retailers.

In Italy, little change has been reported in the market for the past week.


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