One of my contacts summarized the current factory business situation as “We all get a turn. Now factories are becoming theirs. Though it will last for a long time”.
He estimates that if supplies run dry from the shed, things could turn back in the finisher’s favor. As always, this number will be low, and these numbers have been falling slowly but steadily over the past month.
The Agriculture Department’s meat market report for the week ending June 12 shows that more than 30,000 were killed, compared with 31,109 in the previous week and 32,030 in the week before that, compared to a month earlier, for the week ending May 22. 33,140 for , The total kills so far are 11pc (75,371) from 772,267 before the same period in 2021, but the figures above indicate that supplies are slowing down. If this trend continues, then July could be very interesting.
Anyway, the factories have been able to reduce the quotes by 10-15c/kg in the last ten days. This sees base coats for oxen at €5.10-5.15/kg with heifers at €5.20/kg. Interestingly, one source was of the opinion that these reduced prices applied more to any grass cattle coming through the system, as opposed to shed cattle, which they claimed were more than € for oxen. 5.20/kg and €5.30/kg for the heifer.
Your grazing cow is also clipped with a cut of 10-20C/kg depending on the plant. This sees the R at around €4.90/kg, although those with numbers still shouldn’t accept less than €5.00/kg. Friesian O’s and Colored O’s are at €4.80/kg, with possibly less of the P+. See citations for young bulls that are under the age of sixteen months are working on a €5.25/kg basis, with some €5.30 also reported. U grade bulls up to twenty-four months old cost between €5.30-5.40/kg.
Right now, some farmers will complain if quotes are kept as they are, but will factories be happy to sit on their hands?
I’ve said before that “factory owners plan far away” when it comes to where prices might go this autumn. So, the most immediate and obvious concern for those fatteners will appear in the short term is whether processors can drive down base prices.
However, a bigger concern should be whether factory owners will be able to eliminate flat pricing and force sellers to put them back on the grid for a longer period of time. Given that more than half of the country’s cattle come from the dairy sector, this would represent a major victory for factories in their efforts to buy beef cheaper.
If this happens, it will reduce the price of all O and P grades of bullocks and heifers from the base price by 12-36c/kg and in case of those grading from R+5 to P+5 the deduction will be 18- From – 54c / kg.
On a scale of potential savings for processors, the Agriculture Department’s Beef Carcase Classification Report for 2021 recorded 56.7% of all steers slaughtered last year as grading either O or P, with all grade ratings fat scores five. of .4%. In terms of heads, it is 362,161 out of a total steer kill of 634,257 which fell below the base price by 12-54c/kg in 2021.
On the heifer side, 204,103 out of a total of 436,118 slaughtered at export plants last year faced similar penalties.