40,000 per week supply dominates beef market
There’s no bright side to the current beef market for finishers.
With the supply of stock to the plants continuing around 40,000 head per week, and some weakening of export markets in recent weeks, processors are now holding some stocks of beef in their cold stores, further denting finishers’ hopes for a price lift. Perhaps the only consolation is that a 40,000 head per week supply situation not many years ago would have resulted in a very much worse market situation than we have today. Processors have fairly successfully marketed a much increased supply, which would have been much more difficult, if not impossible, for the sector, not many years ago.
But this historical context offers very little consolation for finishers now seeing returns for their animals which are not sustainable, leaving most finishers having to rely on alternative sources of income to subsidise their beef production activities. Beef prices overall remain under pressure at the factories this week, with prices for young bulls reduced by at least 5 cents/kg, cow prices also under pressure, and base prices for prime beef at best unchanged from last week. The base price for steers is 375 cents/kg. It is very difficult for finishers to negotiate anything above that with processors this week. Instead, they are being put on waiting lists for delivery of their animals at several plants, and prices are being penalised for animals which are over-age, or over-weight. The situation is broadly similar for the heifer market, with a base price of 380-385 cents/kg.
Most processors offer the base price of 385 cents/kg, but with reports of some wanting to work off 380 cents/kg. P-grade cows have slipped back to around 240 cents/kg, with Os at 260-270 cents/kg, and finishers are finding it a bit harder this week to hold on to 300 cents/kg for R-grade cows.
The total national beef intake last week slipped just under 40,000 head, for the first time in a month. Reports from around the country indicate that the supply has continued very strong again this week. Last week, the steer supply was around 1,000 head higher than 12 months ago, with the other categories on a par with the same week in 2017.
By the week-end, all of the stock required for pre-christmas orders will have been slaughtered.
The market demand will slacken over the Christmas period, and usually remains quiet for most of January, due to the fall-off in consumer spending on beef after the holidays.
At the recent Kanturk Co-op aart annual fat stock show and sale, Edmond O’connor, Kilbrin, owner of the best beef bullock, with Paul aullaney, Charleville Foods, sponsors of the prize for the class; John Cott, Chairman, Kanturk aart; and show judges Shane Healy, aichael Reidy and aaurice Cogan.