Further 10c/kg catapults beef prices into 'fantasy land'
It has become the understatement of the year to say that the beef trade is in overdrive, writes Martin Ryan.
As beef prices continue to climb, hitting greater record heights week on week, some cattlemen are questioning if the current trade is for real or if the sector has been catapulted into fantasy land.
Up to 10c/kg more has been added to prices across most of the main categories this week, and it has become the understatement of the year to say that the beef trade is in overdrive.
The gap on €8/kg returns at the upper end of the trade is tightening week on week, and the pattern is being followed by a live trade where "yesterday’s dear-as-gold animals are being seen as good value today," such is the rate at which prices are rising.
The base price for heifers at the factories is generally at 690c/kg this week, with many lots making 700c/kg base. Suppliers of Hereford and Angus are benefiting from 25-30c/kg breed bonuses under the Hereford Prime and Certified Angus schemes, plus the 20c/kg for quality assurance.
The general run of base quotes for steers is 670c/kg, while 680c/kg is being paid, plus the quality assurance bonus, worth 20c/kg.
Cows continue to be in demand at 670c/kg in general for good R-grade cows, and young bulls are making up to 700c/kg for R-grade.
Some seasoned cattlemen are describing the climate around the beef trade as "frightening" to know what direction to take, while all agree that they are currently "floating in uncharted territory".
The positives are that predictions from those analysing the world beef production and consumption balance are very optimistic about the future, and the word is that some of the best-informed cattlemen are stocking large acreages of land with store animals.
"It is a very nervous time in the trade. It is a very serious investment to buy in stock this spring. If it goes wrong, the consequences will be very serious, and nobody can guarantee that beef consumers will swallow the higher prices forever," explained one source analysing the situation.
"It could be the best year ever for beef production, but it could also be a total disaster," they added.
The wiser heads in the business will say that "the only certainty ever in beef production is its level of uncertainty," but is 2025 set to buck that pattern?
With a weekly intake of over 38,000 head, processors are still under pressure to source all they can get. That must give some confidence.
Supply last week remained steady at 38,528 head, which was around 1,500 more than the same week last year. The kill included 14,210 steers, 12,274 heifers, 8,633 cows, and 2,353 young bulls.
