Price of slaughter cow in Germany plummets

The German prices of slaughter cattle have taken a sharp downward step in the last two weeks. Due to the lower milk prices, the supply of slaughter cattle from the dairy sector is increasing. Is this trend also visible in the Netherlands? In the past two weeks, the VEZG price (O-quality) fell by 20 cents. This is the lowest quality recorded in Germany and represents the segment of dairy cows. That amounts to a decrease of 3.1%. Especially the most recent price movement was noticeable: the quotation dropped by 15 cents to €6.15 per kilo. Meanwhile, the higher R-quality remained stable. The lower price of dairy cows is the result of the decrease that milk prices have undergone in recent months. The DCA Milk Price Index shows that the average base price for milk has fallen by 5.3% from June to October to €51.77. Milk prices are also decreasing rapidly in Germany. Meanwhile, the spot quotation in week 42 is as much as 40.1% below the base price, at a level of €31. This is a strong indication that the demand for milk is weak and will likely continue to decrease. Insiders in the market report that the decline is due to an oversupply of beef trimmings. Various players have significantly reduced prices to sell more product. Since the trimmings primarily come from a larger supply of dairy cattle, there is particularly an oversupply of lean trimmings. In contrast, there is still a shortage of fatty trimmings. Due to the decline in milk prices, more and more dairy farmers are choosing to slaughter and replace less productive cattle. Slaughterhouses indicate that this process is already underway in the Netherlands. However, this is not yet reflected in the quotations from Livestock & Logistics. Prices remain the same across the board, including for the qualities between the second sausage quality and the O-quality. With the significant reductions in Germany, it seems inevitable that the slaughter prices for dairy cows will also take a step back in the short term in the Netherlands.