Quotes pulled by 5c/kg despite falling numbers
Published 25/01/2012 | 06:00
I t was Isaac Newton who once said that for every action, there is an equal and opposite reaction. This is a very apt description of what is currently happening in the beef trade.
There is without doubt a clear effort being made by the factories to pull quotes to take some heat out of the beef trade. While most of the animals being killed in the early part of this week were bought at last week's higher prices, the factories are attempting to pull their quotes by a minimum of 5c/kg.
It goes without saying that this action will be met by an opposite reaction from beef finishers, who will rightly argue that pulling quotes will see them losing money on cattle they bought and dent the factory-farmer relationship.
However, the elephant in the room is supplies. At 27,535hd last week, cattle slaughterings were almost 1,000hd below the same week 12 months ago. This will help to keep the ball in the farmers' court.
While prices secured over the weekend for steers and heifers were 410-415c/kg for males and 415-425c/kg for females, quotes today are closer to 400-405c/kg for steers and 410-415c/kg for heifers. However, I did hear of heifers being killed in the east yesterday at 425c/kg.
Farmers with good young bulls are negotiating deals of up to 420c/kg flat for a mix of R and U grades and up to 415c/kg for mixed lots of all grades.
U-grade quotes are at 415-420c/kg, Rs on 405-410c/kg and Os at 390-400c/kg.
Interestingly, there is little or no downward pressure being exerted on cull cow quotes by the processors. Heavy R and U grades have made up to 374c/kg, with R grades closer to 350c/kg. O-grade cows are making 336-354c/kg with the P+ cows at 322-342c/kg.