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The prices paid by factories for R4 grading cows are 20p/kg ahead of this time last year, but for prime steers and heifers they are down 2p/kg to 7p/kg across the various grades.
Sources in the trade suggest that the prices for cows could go higher in the coming weeks given that supplies are tight, but the prime beef market could be more difficult to shift.
The rise in cow prices has been driven by an upturn in demand for manufacturing beef, whereas the market for steak cuts from prime cattle remains under pressure. That has driven a fundamental change in the relative prices of cows versus steers and heifers. With between 60% and 70% of the carcase currently being sold as mince, processors are keen to buy good-quality cows.
Farmers also report that some factories are currently applying significant penalties on prime cattle that are overweight, particularly those over 420kg. Processors argue that the striploin out of these cattle does not meet retailer specifications, so they end up selling this beef into the same wholesale market as cow beef.
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