Pricestalemateunlikelyto change in short term
Beef processors and beef finishers are each holding firm in their trading positions t h i s we e k , w i t h p r i c e s unchanged at least for the moment.
The supply continues at a relatively very strong level for early February, which places the processors in a favourable trading position, but markets appear to be picking up after the post- Christmas lull, so there is demand for what livestock are available at the factories, allowing beef finishers some scope for price bargaining.
The result is that base prices being offered this week are unchanged, at 390 cents/ kg in general for steers, and 400 cents/kg for heifers. Some processors are trying to buy both categories at as much as 5 cents/kg less, quoting the lower price and advising that they are not that anxious to take in extra cattle. But this is not being very effective on the ground.
On the other hand, beef finishers trying to drive a hard bargain above the quoted base prices are meeting with stiff resistance from processors. The 390 cents/ kg base for steers is “cast in stone” as far as processors are concerned, but there is slightly more latitude for finishers to get a few cents over 400 cents/ kg as a base for better quality heifers. The total cattle supply last we e k t o b e e f p l a n t s wa s around 34,200 head, which is strong for the end of January. T h e i n t a ke o f s t e e r s i s steady at around 10,000 head per week, while the supply of heifers continues slightly short of 10,000.
The strongest performing sector in terms of supply currently is young bulls, having increased to as high as 6,000 h e a d p e r we e k , w i t h o u t adversely affecting the price. There is a good kill of cows going through the system also, at around 7,500 head per week, with prices having held up well.
O/P-grade cow prices range from 300 to 335 cents/kg, while R-grade cows are making 350355 cents/ kg, and demand is continuing strong.
It is hard to see much of a change ahead in the overall trade, in the short term. Processors realise that they are not going to be able to squeeze prices and maintain intakes at the same time, and finishers realise that processors have demand for the current level of cattle supply.