Beef prices have been sharply cut at the factories this week, bringing to an end one of the strongest ever summer trading period for cattle farmers.
Quoted base prices for all categories of steers, heifers, and cows have been reduced by at least 20 cents/kg, and negotiations to secure deals for more than the ‘offered’ prices for stock have become much tougher.
Steers are being generally quoted at a base of 415 cents/kg, and the base for heifers is at 10 cents/kg higher than steers, with 425 cents/kg the going rate.
Producers trying to negotiate for above the base are meeting with strong resistance from factory agents, who are apparently under instructions not to exceed quoted prices for stock this week.
While processors are trying to attach some blame for the price reductions to the protests in France, the reality is more fundamentally based on timing.
The combination of the August date line on the calendar, deterioration in the weather, and more stock coming close to their 30-month birthdays, is certain to increase the delivery of cattle to factories, where the bosses have been waiting for an opportunity to adjust the prices downwards.
However, the supply last week remained stable at around 29,500 head.
A small percentage of this week’s kill were bought forward at last week’s base, but the full impact of the adjustment is an average €70/head reduction in returns to cattle farmers for in-spec animals.
For animals edging over the 30-months, the combined reduction is topping €100/head, adding up to a substantial drop of more than €2,000 on a load of stock.
The predominant spring calving pattern of the Irish herd, with the penalty for over 30 months at slaughter, comes at a high cost to farmers, but processors were adamant at the recent Beef Forum talks that the 30-month factor is to remain.
The cow trade has dropped to a base range of 350-370 cents/kg for O/P-grades this week, while prices for Rs are back as much as 25 cents/kg, and generally within the 370-380 cents/kg range.
There is very little change in the trade for beef in Britain, where the prices for R4L-grade steers average equivalent to 545 cent/kg (including VAT).
The trade is reported as continuing strong on the back of increased demand, coupled with supplies remaining tight.
Trade for most cuts is performing well, with fillets in particular performing best.
In France, the market remains under some pressure as a result of farmer blockades which has caused disruption to deliveries, while promotions are being centred on domestically produced beef.
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