Beef market report: Supply increase triggers pressure on beef prices

Beef processors attempting to cut cattle prices as much as 5 cents/kg are meeting with resistance from farmers.

The extent of pressure on each factory to procure sufficient throughput will be a major decider of the buying price.

With most processors quoting a base price of 380 cents/kg for steers, and reasonable weather conditions taking pressure off farmers to reduce stocking levels, the outcome can depend on which side most needs to close the deal.

However, any expectation of a deal at more than 385 cents/kg for steers looks like a definite non-runner this week.

The price pattern for heifers is broadly in line with the steers, running at a premium of 10 cents/kg, in a 390-395 cents/kg price range.

The processors are not prepared to pay above 395 cents/kg for heifers this week.

The tightening of prices, while subject to the local supply-demand balances, is a marker by the processors of their determination to ease prices at the first opportunity.

Prices on offer for cows show a very marginal tightening, with the base for O/P-grade cows ranging 280-305 cents/kg, and up to 320-325 cents/kg for R-graders.

It is no coincidence that the downward pressure on the price has come as supply increased. 

Last week, the intake at factories increased by 1,000 head, to around 31,500 head, and the indications are for the strong intake to be maintained this week, indicating that the flow of cattle is now building towards the seasonal peak of supply.

In contrast, in Britain, the market has continued to be underpinned by tight supplies, with demand relatively good, helped by fine weather boosting the trade for steak cuts.

Prices in Britain for R4L-grade steers averaged equivalent to 441 cent/kg (including VAT) last week.

In France, the beef market remained unchanged, with retail resistance to imported product, and promotions taking place in all major retailers, focused on domestically produced mince and roasting joints.

In Italy, little change was reported in the beef market last week.


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