It’s been a tough few weeks in the beef trade, but there are some signs in the market this week that prices have steadied after two weeks of decline.
Many farmers I spoke with this week have stalled sending cattle to factories at some of the lower quotes. The lower kill reaffirms this.
This has forced factories to halt any plans for more cuts.
It has also forced them to move to some of their own feedlots and feedlot finishers to maintain throughput in the last few days. They want the stock, but are playing hardball on prices.
Bullocks continue to trade at €3.70/kg, while heifers are moving around the €3.75/kg mark. There are still a handful of factories quoting €3.80/kg for the right type of heifers.
R grading bulls are generally moving at €3.70/kg, while U grades are hitting €3.80/kg.
Lesser-quality dairy-cross bulls are back at €3.50/kg to €3.60/kg. Under-16-month bulls are being quoted at €3.65/kg to €3.70/kg.
The cow trade is similar to last week, with a little easing in prices for poorer-quality cows. P+3 cows are moving at €2.90/kg to €3.00/kg, with O grading cows moving at €3.05/kg to €3.10/kg.
Good-quality R grading cows are generally making €3.20/kg to €3.30/kg depending on fat cover and quality.
There is a thought out there that this is a stunt being pulled by factories to fill feedlots with cheaper stores.
Store sales in the south have taken a hit this week, so, intended or not, it seems to be working.
Supplies of cattle are likely to be tight for April and May and with no under-16-month bulls in the system to prop up throughput from May onwards, the factories see a pinch point coming here.
The problem was up to now with meal prices and store prices going up, there was little appetite to put cattle into feed. The latest cuts will mean cheaper stores for the bigger players in the market.
Easter is another possibility for a lift in demand. With the current lockdowns still in place for much of spring, retail demand will be expected to lift again in advance of Easter as consumers dine at home over the holiday period.
With Easter taking place early this year on Sunday 4 April, it means factories will be lining up supplies from early March, which is just two weeks away.
Sterling has also strengthened again in the last few days to 87p:€1, which adds further strength to the hands of Irish exporters.
There is also some positive movement in European beef markets in recent days. It’s important to kill cattle when they are fit, but if you can hold on to get through the next few weeks, I’d hold.
Last week’s kill came in at 29,780 excluding veal slaughtering. That’s 446 head back on the previous week’s kill excluding veal.
Exports for direct slaughter to Northern Ireland doubled last week. There were 353 cattle sent to NI for direct slaughter last week, up from 174 the week before.
In Northern Ireland, base quotes have slipped to 370p/kg (€4.48/kg) for U-3 grading animals, but finished cattle prices are holding reasonably firm above the 380p/kg (€4.60/kg) mark for in-spec animals.
Steers are moving off farm around 380p to 384p/kg (€4.65/kg).
Heifers are also moving at similar prices, with 2p to 4p/kg more on offer for regular finishers supplying bigger numbers of cattle.
Demand for cull cows is also holding firm, with quotes on R3 animals sticking at 275p/kg (€3.33/kg), although deals are still being offered around the 300p/kg (€3.63/kg) mark.