Critical period will test cattle price resistance now

Beef processors are continuing to hold the line on cattle prices this week, as supply comes more into balance, which returns some bargaining power to farmers.

It’s normally one of the most expensive periods of the year for processors to source cattle, but the prices for May this year will fall behind peak levels, despite processors coming under extra pressure to source sufficient supplies, as numbers tighten.

There was no change in the prices being quoted at the factories this week, but there are reports of some factory agents coming under pressure to top-up the official quotes, to get farmers to part with cattle.

Base prices being quoted for steers range from 405 to 410 cents/kg.

Most farmers are trying to secure a base of 410 cents/kg, which is more generally available in the midlands and northern regions of the country, than from the southern-based beef plants.

There are reports of up to 415 cents/kg being secured where supplies are scarce.

Heifers are quoted at a base of 415-420 cents/kg, with local supply and demand a factor in getting prices at the upper end of the range.

Intake last week at the factories was just short of 29,500 head.

It is significant that the supply has settled at under the 30,000 benchmark for a number of week — but it is apparently not yet sufficiently reduced to put enough pressure on processors to restore the April prices for beef cattle.

The next month will be a critical period to test the resistance of processors to farmers’ price demands.

The colder weather and heavy rainfall in May which has slowed grass growth, will push back the first of the cattle off grass this year, adding to the pressure on processors, if their intake continues to fall back over the coming weeks.

The cow trade is also steady this week.

Base prices for O/P-grade cows range from 355 to 370 cents/kg.

Up to 385 cents/kg is being offered for the better quality R-grade cows.

Demand for cows continues unchanged at the factories.

In Britain, prices for R4L-grade steers are averaging equivalent to 491 cent/kg (including VAT).

The trade is reported to have eased somewhat, due to a slowdown in demand.

In France, there has been little change reported in the beef trade, with promotions on going, centred on roasts, fillets and sirloins.

In Italy, the trade continues to be affected by a rise in supplies and a slowdown in consumption. Demand is best for cheaper cuts. It is hoped that promotions will help the trade over the coming week.


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