Factories bring halt to price cuts as heatwave boosts demand

A few weeks ago a mart manager in the north-west told me one of his feedlot finishers had few concerns about the strong prices he paid that day, even though factory quotes had started to drop.

They won’t stay falling forever,” he said.

And so it would now appear. Quotes for both bullocks and heifers settled at €4.80-4.90/kg yesterday, alleviating fears that prices could tumble even more.

The pause in the drops is surprising, given that the kill for last week was estimated as not far off the 33,000 recorded the previous week.

So why might the factories have held back on further cuts, given their dominant position and the lack of any organised opposition to such a move?

Perhaps extra demand for manufacturing beef during the heatwave here and across the UK and Europe caught them a little unprepared.

While the more expensive cuts may not be selling to the same pitch as previously, I don’t hear stories of cold stores full of the stuff. Even if those dearer cuts have to be minced and mixed with plainer-quality meat, it’s all getting sold one way or another.

To back up this argument, cull cows — the bottom rung of the beef price ladder — had already steadied last week, with continental Os selling from €4.50-4.60/kg and Friesian Os €4.40-4.50/kg while P grades settled at €4.30-4.40/kg.

It’s a similar story on the young bull side — another prime source of burger beef — with prices steady.

For those under 24 months, U grades continue to operate from €4.90-5.00/kg, with R grades on €475-4.80/kg, which is the base price off which prices for bulls under 16 months are calculated.

Department figures for the week ending July 17 report the overall Irish dead-weight cattle price as being just one cent above the overall EU average at €4.93/kg.

That’s a fall of 33c/kg in seven weeks — back then, our average of €5.26/kg put us ahead of most other EU countries with the exception of the Netherlands, who were on €5.43kg.

Although the overall Dutch average ha slipped by 13c/kg to €5.30/kg by July 17, they are now 37c/kg ahead of prices here.

French average prices have plateaued at €5.13/kg, exactly as they were at the end of the first week in June.

The underlying trend across Europe over the last seven weeks has been upwards, with the overall EU average price strengthening by 7c/kg from €4.85/kg in June to €4.92/kg now.

Steer prices in Britain for the week ending July 17 shows R4Ls as trading at €5.32/kg with R4L heifers averaging €5.31/kg.

All of the above indicates there is plenty of room in the system for factory prices to improve.

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