Pressure on beef finishers to hold line at €4/kg
Erosion of beef prices at factories continued this week, with the weekly returns to beef finishers estimated to be down as much as €1m compared to the prices which were being paid at the beginning of June.
Processors have cut prices and rely on the flow of cattle to their plants being sufficiently strong to overcome any resistance from finishers, and to meet their market requirements.
The base price on offer for steers has eased to 400 cents/kg at a number of plants this week, but with a few still willing to offer a base of 405 cents/kg.
Most beef finishers are trying to hold out for 405 cents/kg, but it is getting harder to achieve, and reports of up to 410 cents/kg being paid are few and far between.
There is no doubting that the challenge for finishers going forward will be to hold the base at 400 cents/kg for as long as possible into the autumn.
The base for heifers is running at 10 cents/kg over steer prices, with quoted prices at 410-415 cents/kg.
As usual, it is a shade easier with heifers, compared to steers, to get into the higher end of the price range.
Cow prices have also slipped back, for lower grading cows in particular, over the past couple of weeks.
O/P-grade cows are now on a base of 300-330 cents/kg, with the better quality making up to 335 cents/kg.
There is still good demand for the quality R-grade cow at 350-355 cents/kg.
The total cattle intake at the factories last week was around 34,000 head, slightly lower than the previous week, resulting from a drop in the supply of cows.
In Britain, beef the trade remained strong through last week, as recent fine weather boosted the trade for barbecue products such as steak and burgers, and supplies of finished cattle remained tight.
This market situation lifted prices, and R4L-grade steers averaged equivalent to 446 cent/kg (at 88p sterling for the euro, and if VAT is included).
The weaker sterling since the UK general election continues to make Irish product more expensive in the UK.
In France, the beef market is reported to have remained slow, due to lower demand in recent heatwave conditions.
Beef retail promotions are ongoing, but are mostly for French produced beef only.
In Italy, the market remains slower, also due to consumption easing during the recent hot weather (soaring temperatures and lack of rainfall across Italy have cost the country’s farmers €1 billion so far this year, according to their Coldiretti national agricultural association).
The beef market in Germany is described as being relatively in balance.
