More stock sees prices fall further
More stock sees prices fall further
By Simon Wragg
CONCERN over a shortfall in prime cattle looks out of touch this week as more stock comes off grass, hitting markets and pushing prices down further. Values are following a seasonal decline but heavy retail promotions are helping shift supplies, albeit at a price.
MAFF slaughter figures show that the change in supplies in late August and early September is set to continue. The combined total for steers, heifers and bulls had been relatively stable at 43,000/week until Sept 9; that could rise to 47,000 head.
Retail markets are also managing a seasonal switch as consumers move back to traditional joints after a summer of easy-cook barbecue meat dishes, say traders. That has prompted the big supermarkets to agree significant promotions with suppliers to "get interest back into joints", say buyers.
Among the best buys has been Tescos half-price promotions – now in their third week – which last week pushed chickens before moving on to roasting joints and will feature mince this coming week, says the company. Sales for different categories are said to be up five to 10 times the norm.
Although higher throughputs at abattoir and store level will help compensate for the loss of what were already tight margins, the current easing of prime values will also have helped, say traders.
According to Meat & Livestock Commission calculations, deadweight prices have mirrored the slip seen in live markets, with 1p/kg wiped off plant averages last week. For the week ended Sept 16, steers sat at 172.3p/kg deadweight, heifers 167.2p/kg and young bulls – taking a 2p/kg drop – at 165.6p/kg.
Lower fat prices will squeeze finishers profits, particularly those who bought stores in spring. "There is little doubt about it," says Chippenham-based auctioneer Trevor Rowland.
However, finishers need cattle and the rise in store cattle numbers has again been met by strong bidding, particularly for older stock showing some finish. Producers who have been feeding forward stores for the past few weeks will get a return, adds Mr Rowland.
As an example, 16 to 18-month-old steers on Blue CIDs are being bid at 110-120p/kg liveweight, with heifers slightly back in the 90p/kg bracket. Some smaller finishers may be tempted to move cattle early into the store ring to take advantage of the price differential, say auctioneers.
The national picture suggests that store values are slightly back on last month in England and Wales, although little change has been noted in Scottish marts. Overall, year-on-year figures highlight that bids are now stronger by about 2% nationally across all breeds and sexes, despite prime values being lower. *