Beef prices remain under pressure

The Dutch slaughter cattle prices have fallen further this week. The Vee & Logistiek quotations fell across the board. This means the downward movement continues. In Germany too, the market has come under further pressure. The decline in the cow price is even considerably larger this week.The cattle market remains under pressure. All slaughter cattle prices have fallen by 10 cents this week. This lowered the price of U-quality cattle to €6.30 per kilo. The O-quality fell to €5.03 and first sausage-quality cattle fell to €3.35.The price decline is not unexpected. For several weeks market participants have been reporting that slaughterhouses are trying to reduce the prices they pay for cattle further. The supply of slaughter cattle is sufficient, while sales of beef are difficult. That combination gives buyers more room to put further pressure on livestock farmers and cattle traders. The main cause of the weak market sentiment lies further down the chain. Consumers have reacted strongly to the higher beef prices. Sales of the more premium cuts in particular are difficult. For products that can easily be replaced by other meats, demand is also under pressure.Germany is falling even harderThe main reason the market has come under even greater pressure, however, is that prices in Germany are also under significant pressure as a result of low demand. The VEZG quotation for O-quality slaughter cows fell by no less than €0.25 to €5.30 per kilo slaughter weight. The size of the latest German price cut is especially notable. In previous weeks, the quotation fell by €0.10 per kilo each time. This week’s reduction is therefore more than twice as large. This indicates that German slaughterhouses are pushing prices down more aggressively to bring cattle prices in line with returns in the meat market.A week earlier, the German quotation was still at €5.55 per kilo. At the end of June, €5.65 was quoted and on 22 June the price was still €5.75 per kilo. That means the German cow price has fallen by €0.45 per kilo in three weeks. The development in Germany reinforces the picture that the pressure on the cattle market is not exclusively Dutch. In both countries, slaughterhouses currently have the upper hand. The key difference is that the German correction this week is considerably sharper.Irish prices keep risingThe Irish cow price has shown a clear V-shaped movement over the past few months. From €6.66 per kilo on 26 April, the quotation fell almost continuously to €6.19 per kilo in the week of 14 June. After that, the market turned. Over the following four weeks, the price recovered by €0.48 to €6.67 per kilo on 12 July. That means the Irish cow price is now even slightly above the level of the end of April. The recovery is mainly the result of a suddenly tighter supply of cattle ready for slaughter. From the beginning of June, the weekly number of slaughters in Ireland fell sharply. In weeks 23 through 25, total cattle slaughter remained below 24,000 animals, an exceptionally low level for a full summer week. By 5 July, moreover, nearly 29,600 fewer cows had been slaughtered than a year earlier, a decline of 14.6%. Because availability was lower, slaughterhouses had to compete more strongly with each other, which pushed prices higher.