The pronounced shortage of grassfed finished cattle continues to underpin the slaughter cattle market, with some price references posting modest increases compared to the previous week.
Even so, in broad terms, market prices have remained largely stable since mid-June, about four weeks ago. "Some plants are paying up to US$ 5.65/kg for heavy, top-quality steers, while others remain reluctant to raise their buying prices," one market operator told WBR yesterday afternoon. The benchmark for top-quality steers is US$ 5.60/kg, with US$ 5.50/kg as the base for good finished steers. Lightweight finished cattle for the domestic market, both steers and heifers, continue to be in strong demand, with heifer prices based around US$ 5.50/kg.
For cows, prices of US$ 5.30/kg for heavy lots have become more common, whereas such levels were only reached sporadically last week.
The supply of cattle finished on native pasture dried up several weeks ago, and the severe winter cold will delay the arrival of the next wave of finished animals. In addition, winter forage crops and improved pastures are developing more slowly than usual, further contributing to the tight supply.
Slaughter bookings are running at around 10 days, leaving most processors in a relatively comfortable position, supported by a steady flow of feedlot cattle.
International markets continue to show sluggish demand and declining prices, leading processors to remain cautious when purchasing cattle despite the limited supply. Plants that are under greater pressure—either because they are operating kosher programs or require higher-quality cattle—are the ones paying the highest prices.
The expectation is that the market will remain firm, supported by the tight supply, although there is little expectation that prices will resume a sustained upward trend.
