Record high for factories as price fall is just 2c/kg
Published 06/09/2011 | 05:00
Beef processors paid an average of 5c/kg more than their quoted prices for cattle to maintain supplies during August, according to figures compiled by the Department of Agriculture.
In the process, the factories set an unlikely new all-time record high for beef for the month.
The Department database shows an average base price of 363c/kg was paid for R=3= steers, while the average base for R=3= heifers was 373c/kg.
It was also the first time in several decades that the average price fall over the course of the summer was just 2c/kg, a sure sign that factory supplies are under severe pressure.
But farmers will be unhappy with the fact that the price penalties for poor grading animals are several multiples of the bonuses being offered for premium quality cattle.
This disparity in the pricing structure would appear to favour the beef processors, given that lower grade cattle grading O outnumber those grading U by over seven to one.
The average premium over the base price for U=3= steers was 15c/kg, while an average penalty of 23c/kg was applied to O=4= steers.
There was also a wide variation between individual factories on the premiums and penalties applied.