Market balance

Effect of rain on livestock supply could tip beef market balance

The beef trade remains unchanged, with finishers resisting attempts by processors to cut prices.

Any change in returns to finishers is marginal, depending on the balance of supply and demand in each beef plant area.

However, the sharp deterioration in weather conditions over the past ten days, which delivered two thunderstorms and several centimeters of rain, tipped the market balance in favor of processors, while the soil conditions on farms deteriorated after a excellent growing season for the grass, which has given good performance in the pasture of slaughter animals.

Some factories cite a base of 360 cents / kg for steers this week, but overall it is understood that most steers come into factories on a basis of 365 cents / kg.

However, finishers looking for more are not very successful.

With climate change and an increase in livestock likely to become available for factories, keeping the base at 365 cents / kg will be a challenge for finishers in the coming weeks.

Heifer prices have come down a notch, and a percentage of heifers would now be considered to pass through factories at the same price as steers, on a basis of 365 cents / kg.

However, some feeders charge 370 cents / kg for heifers.

Young bull prices are now lower than steer prices by up to 15 cents / kg, with a base of 350 cents / kg for R grade, and up to 340 cents / kg or less for O grade.

Demand for young bulls remains low in factories, with throughput at around half of the 2019 level and the market appetite for young bulls remains low.

The supply trend and the cow trade remain stable

Cow trade remains stable at last week’s prices of up to 320 cents / kg for top R-grade cows, as a steady flow of cows to factories continues.

O-grade cows earn between 290 and 300 cents / kg, while P-grade cows earn around 270 cents / kg.

Now that we are on the anniversary of the 2019 factory protests, with 1,114,043 animals treated through the week ending August 16, the annual throughput has caught up with that of last year.

The trend for entries into factories remained stable last week with 34,378 head processed, at par with the same week in 2019.

There was a strong supply of steers at 16,928 head, 2,000 more than the corresponding week last year.

There was little change in the supply of heifers at 9,168, while the supply of cows at 6,104 was 400 head less than in 2019.

Young bulls continued at about half of 2019 levels, with 1,486 heads processed last week.

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