Beef prices remain stable due to low supply

The European cattle market remains tense. The demand for meat is rather low, but because of weak supply and a low willingness to take a loss, the industry is not yet willing to lower prices to drive demand.The Northern European beef price remains very stable. Since the end of December, the average EU carcass price for R-grade cows, as well as O-grade cows, has barely changed. This is not because the market is very balanced at the moment. Market participants argue that beef sales remain weak. Still, prices are not coming down, as a lot of participants are afraid to create a downward spiral in which traders have to take a loss on each of their next transactions. As a result, pricing remains high and buyers remain rather cautious.As a result, trades are still made in small amounts at a time. Traders who are used to buying beef for the next few weeks now place orders only until the end of the week. This process ensures the seller a profit, albeit a small one. Meanwhile, the buyer does not purchase large amounts of beef for too high a price, and they know that they will be able to resell all of their stock.Lower slaughter rates A low supply of quality meat is one of the reasons the beef price remains elevated. In most European countries the availability of cows is simply quite low, and as a result it turns out to be quite hard to suppress cattle as well as beef prices to drive demand for meat. In Germany, for example, the slaughter rate this year was down quite a bit compared to the year before. The slaughter rate is clearly lower than in the same period last year. Over the last 13 months the average slaughter rate was 4.7% lower than in the same period a year ago. This year the average number of slaughtered cows in this period was 56,800 cattle, compared to 59,880.In Ireland, the average was even 13% lower. The average cattle kill was 29,800 head a week, compared to 34,300 head the year before. The slaughter numbers in France meanwhile are also suppressed considerably; the average number of slaughtered cows in January was down by 7.4%.One exception is the Dutch market, where the number of slaughter cows is still high. In the Netherlands the slaughter number has been going up again after having slid consistently up until week 8. The biggest difference between the period before week 8 and the last two available weeks becomes clear when you compare between years. Up until week 8 the slaughter rate was consistently high. Since week 8 the slaughtered numbers are around the level that you would expect based on the last two years.