Analysis Cattle & Beef
Bulls on beef market due to shortage of bulls
The beef prices have risen significantly in recent weeks. The higher prices are the result of considerable scarcity in the cattle market. Insiders in the market indicate that both meat and cattle prices will continue to rise for the time being. The scarcity is being felt across the market.
The cattle prices continue to take significant steps upwards. Currently, there are clear differences in the price development of various price categories. The U-quality increased by 10 cents this week. Meanwhile, the P-quality has increased by 12 cents. However, first-quality cull cows only became 2 cents more expensive. The week before, the prices of U and P quality had already increased by 10 cents.
The story in the beef market remains roughly the same as in previous weeks. The demand for cheap products such as trimmings remains particularly strong, while luxury parts prove difficult to sell. Consumers are clearly trying to save money to be able to spend a little more during the holidays. According to insiders in the market, the sale of loin cuts is struggling.
Furthermore, the current low meat imports to Southern Europe are not helping. Generally, a significant portion of luxury meat is exported to this region. There is hope that demand will pick up around Christmas, but insiders in the market mention that the holidays have not provided much boost in recent years. The market attributes the weak December months in recent years to the growing popularity of lamb meat in the region.
An exception applies to the most luxurious segment. Companies serving the high-end market indicate that demand is very stable. Within this segment, it is noted that customers have hardly been influenced by the usual seasonal patterns throughout the year. Consumption remains consistently good.
Supply remains weak
Opposite the demand that has been constant for months, there is a rather weak supply. This applies to both dairy cows and luxury beef cattle. Milk prices are currently at a high level. In particular, the price of cream is very high, and the butter price is also high. As a result, dairy farmers choose to slaughter less productive cattle as late as possible.
This has a clear impact on the lower end of the market. The lower availability of dairy cattle results in rising prices for cattle of sausage quality. But the impact is particularly significant on the P-quality, as dairy cattle are slaughtered later. This has led to a decrease in the quality of the cattle, causing the cattle being delivered to mainly fall into the sausage categories.
There is also considerable scarcity in the luxury categories. Insiders in the market mention that scarcity has arisen throughout Europe because exports of beef cattle from France have significantly decreased. As a result, the market is relying on Polish cattle. However, insiders mention that these cattle are considerably lighter than French cattle. Polish cattle are usually exported at a weight of around 300 kilos. Polish cattle of the same age often weigh about 75 kilos less. This means that the cattle in the Netherlands have to be re-measured a second time. Slaughterhouses indicate that purchase prices have so far increased by 3% to 4%. As a result, the selling price decreases by about 5% to 6%.
Importing meat is currently not an alternative, as prices are high almost everywhere. Due to the scarcity in the American market, meat prices are high everywhere. Insiders in the market mention that importers are looking to markets like Botswana for trimmings, as prices in that market are about 60 cents below the current world market level.
