Markets for milk and beef cattle are diverging further

It remains difficult to speak of one beef market. The market for cull cows and beef cattle is still diverging. The result: clear pressure on dairy cows, but stable beef cattle prices. This means that prices in the Netherlands and Germany are increasingly drifting apart. The Livestock & Logistics quotation clearly shows the current market situation. A clear trend is visible: the higher the quality of the cattle, the smaller the decline. The U-quality remains stable this week at the level of €6.90 per kilogram. Meanwhile, the price of O-quality cattle decreased by 5 cents to €5.68 per kilogram. The price of first-quality cull cows also dropped by 10 cents. The quotation has thus settled at a level of €4.05 per kilogram. The situation in the beef market remains largely unchanged. The availability of beef cattle remains low, while dairy cows are still abundantly available due to low payout prices. The consequences of this are evident. Slaughterhouses continue to lower their prices for slaughter cattle, which affects the price of by-products, which keeps crawling down. This is partly due to a stronger supply, but export pressure on by-products also continues to push the market down. Looking at the premium segment in the meantime, we see that beef cattle are difficult to purchase and remain expensive. However, the demand for premium meat is not very strong, which makes it difficult to raise prices. The consequence of this is that slaughterhouses in this segment, such as smaller catering slaughterhouses, find themselves in a difficult situation. The costs are simply higher than the revenues, putting significant pressure on the margins. VEZG declines less In Germany, there is still no comparable pressure. The German VEZG quotation remains the same and at the same level. The price of O-quality cows remains €5.85 per kilogram. Meanwhile, the Dutch price, which was long equal to or higher than the German price, is now clearly lower. The price in Germany is currently 3% higher than in the Netherlands based on the quotations. This can partly be explained by the fact that cattle in Germany are traded in mixed lots. In the country, it is common not to buy individual cattle, but whole trailers at once. The trader makes a mix of dairy cows, beef cattle, and cattle with or without a Tierwohl label. Due to the tightness in the beef market, it is difficult for slaughterhouses to influence the composition. If you try to refuse a trailer, you lose the entire trailer, including the scarce beef cattle.