The finishers who held back cattle for additional feeding over recent weeks are being rewarded with higher factory prices as processors come under more pressure.
Base prices for both steers and heifers have strengthened by 5-10c/kg in a push by factories to source sufficient stock to fill their pre-Christmas orders. In the northwest, the base for steers and heifers within their preferred weight range has increased to 530c/kg and 535c/kg, respectively.
Steers are being quoted on a base of 515-520c/kg, while the base for heifers has increased to 520-525c/kg this week, with the market for finished cattle at factories being described as "hot."
One supplier noted: "It is not very often that autumn cattle finishers are paid by factories for extra feeding, but current prices are giving a good return."
He added: "You could describe it as a 'hunger' among factories to get cattle this week as they compete with each other with extra money if needed."
There is a growing perception in the sector that processors may have oversold when securing market contracts months ago and are unexpectedly caught by the drop in average carcass weights compared to other years, adding up to additional numbers needed to fill orders.
Slaughtering for the pre-Christmas market is close to peak, and a combination of strong beef market orders and lower-than-expected carcass weights has put processors under severe pressure.
Beneficiaries are the finishers who held back cattle over the past two months, investing in further feeding to earn higher prices and heavier weights. It's been a win-win for those farmers—not something that happens often.
The current market climate comes with a warning for finishers to strike while it’s hot. There's a belief that processors hadn’t planned to pay current prices but are under pressure to meet orders, likely considering price readjustments as soon as possible.
And that could be the first day they’re relieved of pressure to fill orders. A guess — hazardous — places that two to three weeks forward.
The R-grade young bulls are making 530-535c/kg, and R-grade cows are now worth up to 500c/kg for larger numbers and generally 485-490c/kg.
Last week’s intake was 33,849 head, strong for the four-day week following the Monday bank holiday. The supply included 13,169 steers, 10,010 heifers, 8,995 cows, and 1,190 young bulls.