Factories flex muscles with another drop in beef quotes

For the second week in a row, factories have pared another 10c/kg off beef quotes.

The cut is across the board, with most categories seeing a reduction in quotes this week.

A lot of cattle that are being killed early this week are being killed at last week’s prices, but cattle being sold later this week are back 10c/kg across the board.

They are citing issues around retail sales being the main driver of the price drop, but their own agents continue to send mixed messages around mart rings this week.

Factory agents are paying the equivalent of €8/kg for cattle in marts. I saw March 2023-born Aberdeen Angus heifer weighing 515kg make €2,070 in a mart last Friday.

Deductions

The heifer was finished and would be an O= at best. At a 51% kill-out, the heifer comes in at 263kg carcase weight. At a base price of €7.40, adding in the 20c/kg QA in-spec bonus for quality assurance and a further 20c/kg for a breed premium and take off 18c/kg for the grid deductions, that means the heifer comes in at €7.65/kg final price.

When you add in conservative figures for commission, transport and killing costs, the heifer is coming in at €2,150, so would need to be making €8.17/kg to break even.

That means the buyer of this heifer would stand to lose €137 on this heifer. There isn’t a chance that the agent in question was going to lose €137 on the heifer, so that means factories are buying cattle in marts at the equivalent of €8/kg and over it.

It’s probably easier for them to source cattle at higher prices in marts where they can go relatively unnoticed in terms of buying activity. Printing €8.17/kg on a kill sheet is a different story.

Bullocks are being quoted at €7.30/kg, with heifers working off a base quote of €7.40/kg.

Flat prices for Aberdeen Angus in-spec bullocks and heifers are ranging between €7.60/kg and €7.65/kg, back 50c/kg from the peak about eight weeks ago.

Cows

R grading cows are generally trading at €7.00/kg to €7.30/kg, while O grading cows are coming in around €6.90/kg to €7.00/kg.

There is a big range in quotes for P grading cows, with those with numbers able to bargain more and up to €6.50/kg to €6.70/kg being paid.

Bulls have also seen a slight correction, but €7.60/kg is still available at the top end for U grading bulls, working back to €7.30/kg to €7.35/kg for O grading bulls.

Again, larger feeders have been able to hammer out better deals.

Under-16-month bulls are working off a €7.30/kg base, with a little more going where there are numbers involved.