Multiples keep the lid on
Prime cattle prices are rising again after a brief period when the market was unsettled by traditional seasonal demand and supply pressures prevailing over the influence of an anticipated cyclical scarcity. But in this complex trade there is talk of supermarket buyers trying to keep the lid on deadweight prices while auction ringside bidding pushes up the live values.
Early in the week most decent quality steers and even some of the big heifers in the rings were getting to well above 90p liveweight before the auctioneers' hammers fell. Yet in the mainstream direct procurement market, at least some of the movement was still in the opposite direction, with Robert Forster of the National Beef Association complaining of plants paying 12p deadweight less than a month ago.
"But there are clear signs the upwards pressure caused by shorter supplies of domestic cattle is still there," Forster claimed on Monday.
Superficially, this was an odd assertion, as the distinctive feature of the UK cattle market in the last few months has been the failure of throughputs to fall as MLC forecasters expected.
Yet Forster was correct in noting subsidy payments from March 1 had not released pent up extra supplies to the plants or into the rings.
The emerging picture is of margin trouble for the processors at the top to the quality range, with the multiples held responsible, but also grumbles about "discounted" imports of forequarters and mince. Ireland is now blamed for the stress similar to the problems caused by intervention sales last year.
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