Price slips as supply of cattle reaches 34,600

The strong supply of cattle to the factories is undermining returns to farmers, as prices come under increasing pressure.

More processors quote the base price for steers back to 375 cents/kg this week.

While most of the cattle going through the factories for the early days of this week would have been booked last week at the prices prevailing then, intake for the second half of the week looks set to be priced back by 3-5 cents/kg, as more agents stick to the lower base price.

The same pattern applies to the trade for heifers.

The base price on offer, in general, has been reduced to 385 cents/kg, along with more of a ‘take it or leave it’ attitude at the factories.

It is therefore difficult this week to negotiate for extra for either steers or heifers, and the volumes making 380 cents/kg for the steers or 390 cents/kg for heifers appear to be rapidly diminishing.

The increasing strength of supply to the factories over recent weeks provided the processors with the perfect recipe to put pressure on cattle prices.

And everyone in the business of finishing beef knows that prices drop much faster than they rise.

Export demand for beef has not increased on a par with the increase in supply of cattle to the factories.

However, UK cattle prices have moved further ahead, and the trade for cows at the Irish factories remains strong and prices stable, which is usually a good indicator of the the prime beef trend.

The O/P-grade cows are generally at 305-320 cents/kg, with up to 325 cents/kg being paid, while the return for Rs is strong at up to 340 cents/kg, with some reports of a few cents more being achievable.

Another surge in the overall supply of cattle to factories last week reached a year-to-date high of around 34,600 head.

This included a strong intake of cows at 7,500, and over 10,000 heifers, while the young bulls amounted to 5,300 head.

The trade in the UK remains steady with supply and demand relatively balanced and a slight hardening in the prices paid to farmers. Prices for R4L grade steers increased to the equivalent of over 450 cent/kg (at €1 for 85p sterling).

In France, the market continued to be dominated by domestic product, over the past week, while demand for cuts such as entrecotes and steaks remained poor.

The trade was best for offal products; promotions focused on domestically produced ribs.

In Italy, little change was reported in the trade for last week.

Meanwhile, in the US, the latest outlook from the USDA is forecasting a 3% rise in beef production in 2017, compared to 2016, reaching almost 12 million tonnes.

This is anticipated to lead to a 5% rise in exports, while imports are projected to decline by over 10%.



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