Beef and sheep price update: factory prices lose further ground

The beef trade remains in a challenging position. Base steer and heifer quotes have fallen by 10c/kg, while the cow trade is enduring an even tougher trade, with prices back by as much as 20c/kg.

Steer quotes are in the region of €3.50/kg. Heifers are also trading in the main on a similar base, with infrequent select deals completed 5c/kg higher.

Supplies are tightening in some areas, but so too is demand. A number of factories are operating at lower capacity, with some killing half days or with reduced daily capacity. This is being carried out in cases in a bid to better adhere to social distancing guidelines.

Demand for cows

Demand for cows is particularly weak, with prices falling by another 10c/kg to 20c/kg in the last week. This brings the total drop in cow prices to 40c/kg over the last two weeks, or €100 to €120 on an average carcase weight of 300kg for smaller-framed cows and as high as €150 to €160 per head for heavy-carcase cows weighing up to 400kg carcase weight.

P+3 grading cows are being quoted from €2.50/kg to €2.60/kg this week, while O grades are ranging from €2.60/kg to €2.70/kg and R grades from €2.80/kg to €2.90/kg.

Cow prices are on par with the corresponding period in 2019, but the difference is the trade was strengthening due to the seasonal reduction in supplies.

Cow prices increased by 30c/kg during April 2019, while steer and heifer base quotes lifted 20c/kg on average.

Bull trade

The bull trade is also experiencing downward price pressure. U grading bulls range in price from €3.45/kg to €3.50/kg, with some plants with little interest in bulls quoting back to €3.40/kg.

Likewise, R grading bull quotes range anywhere from €3.30/kg to €3.45/kg. Meanwhile, O grading bulls range from as low as €3.10/kg to €3.15/kg for plainer-quality types to €3.20/kg to €3.25/kg for better-quality fleshed O+ grading types.

The collapse in the trade is leading to renewed calls for the EU to act quickly and move to support prices.

Meat Industry Ireland released a statement on Monday stating that factories are struggling to maintain throughput given the collapse in the food service market.

NI price pressure

The situation is no different in Northern Ireland, with plants pulling prices by 4p/kg to 8p/kg for this week. This leaves U-3 base steer and heifer quotes averaging from £3.22/kg to £3.28/kg.

Sterling has regained some lost ground in recent days, which should at least help exports into the UK. The sterling to euro exchange rate has increased by 3p/kg and on Monday evening stood at 89p to the euro. This leaves Northern prices at the equivalent of €3.62/kg to €3.69/kg and €3.81/kg to €3.88/kg including VAT at 5.4%.

The collapse in the hogget and spring lamb trade has not finished. Factory quotes for hoggets fell by 20c/kg to 30c/kg since Friday.

Factories are quoting a price of €5.00/kg to €5.10/kg, with prices at the upper end of the market ranging in general from €5.20/kg to €5.30/kg.

There is a wider differential in the trade for spring lambs, with quotes ranging from a base of €5.60/kg plus quality assurance bonuses to a base of €6.00/kg with bonuses applied thereafter.

Reports suggest orders in key export markets such as France, Germany and Belgium remain on a go-slow. But on a positive note, supplies appear to be starting to tighten, which will hopefully help to underpin a level of demand and stabilise the trade.