'It doesn't add up': How can demand for cattle be strong but beef prices poor
“We've been here before” was the comment from a couple of factory agents I spoke to at the weekend.
They were referencing the fact that last year factory prices were fixed for nearly three months, with bullocks on a base of €3.90/kg and heifers in and around €4.00-4.05/kg. Those prices from last year, especially for bullocks, remain aspirational at best.
This week bullock prices are welded to something between €3.75-3.80/ kg. The heifer is in a slightly better place with base prices continuing on €3.90-3.95/kg, with that €3.95/kg possibly getting a little easier to achieve.
One very experienced finisher claimed his bullocks coming out of the shed broke even “at best”. But that at 15c/kg less this year at €3.70-3.75/kg they were in danger of not only losing money but of moving into “negative equity”.
Moving possibly a little bit more into positive territory is the price of the cull cow might be a little firmer. While officially remaining at last week’s prices of €3.40-350/kg for Rs, €3.20-3.25 for O grades and Ps running from €2.90-3.15/kg, there was hint about yesterday morning that these prices, although entrenched, might on occasion be improved on.
The story with bulls is somewhat similar with quotes as of yesterday morning appearing to remain unmoved at €390- 395/kg for U grades, with Rs on €3.80-3.85 and O grades a further 10c/kg further back at €3.75-3.65/kg.
When you take all of the above and stir it around a bit what do you get? A beef trade that while not returning any great margin of profit for specialised finishers, appears to be hungry for cattle.