Factories under pressure as annual cattle kill falls by 8,800 head
Prices have been increased by 10–15c/kg on the back of intense competition between the processors to source sufficient cattle to fill their requirements this week, as the fall-off mounts pressure on factory procurement agents.
Intake last week was down a further 500 head to 23,809 head, the lowest year-to-date, and back by 8,800 head on the corresponding week last year, which has plunged the processors into a situation where they would prefer not to be.
All main categories of stock are back by more than 30% on the same week last year, and the total intake year to date has now slipped to 2,500 head behind the same period last year. With supply for the year predicted to be down by up to 90,000 head on 2024 level, the months ahead are now looking very bleak for the processors, while the outlook for finishers continues to gain positivity.
The weekly supply to the factories peaked last January at 39,114 head and slipped below 30,000 head for the first time in May. Four weeks ago the processors were getting a weekly intake of 29,114 head.
Over the past three weeks, the steady decline has reduced weekly intake by 5,300 head/week and the factories are under real pressure to source sufficient to meet their requirements on filling contractual orders. The producers are becoming 'price makers' rather than 'price takers' in a reversal of the balance of control on supply.
Steers this week are generally on a base of 740c/kg with individual factory prices ranging between 730c/kg and 750c/kg this week. Generally, the smaller factories are having to pay the higher prices, but the suppliers with larger numbers to offer are also in a stronger position to bargain for higher prices before selling.
Base prices being generally paid for the heifers are ranging 750–760c/kg.
Producers with Hereford and Angus getting the breed bonus of 25–30c/kg on top of the quality assurance bonus are now reaping returns that have topped €8/kg in roaring demand for these animals.
The demand and higher prices are showing across all categories. The demand for cows is reported to be very strong with up to 730c/kg being paid for R-grade this week, with prices ranging from 710c/kg, while R-grade young bulls are generally making 750c/kg.
Producers with factory-fit animals are in a commanding position to adopt a hard sell for the higher prices, and the option of live sale through the marts, where the factories are having to openly compete against each other, is gaining momentum.
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ICMSA slams factories over beef price quotes amid soaring live export demand
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