Tight supply dictates market for broiler cows

Cattle prices have been at record levels for months, mainly driven by a tight supply of animals for slaughter. Recently, prices on the cattle market in Leeuwarden increased further for both bulls and cows. The price for cows for slaughter in particular is increasing significantly almost every week. In the trade it is noticeable that livestock farmers hardly offer animals for slaughter.

Uncertainty surrounding animal rights and high milk prices
According to traders, two factors underlie the tight supply. In December, former Minister of Agriculture Schouten made it clear that the possibility remains of introducing an animal rights system to replace the current phosphate rights system. That makes livestock farmers insecure. They would like to maintain stable occupancy levels to ensure that they do not have to deal with understaffing if a new animal rights system is introduced. In addition to the uncertainty surrounding this, high milk prices play a role. Livestock farmers continue to milk cows that are nominated for culling for longer, which further limits supply.

In addition to the limited supply of cows for slaughter, the supply of beef cattle is also limited. Although the meat trade sometimes has difficulty recovering the sharply increased purchasing prices further down the chain, supply currently dictates the market.

The situation outlined in the market is clearly reflected in the slaughter figures of the Netherlands Enterprise Agency: the supply is very limited. Moreover, parties in the cattle trade do not see it happening that supply will increase further if prices are further increased. It ensures that there is a stable basis for the high prices for cattle and beef for the time being.

German beef production also recorded a minus
The supply of cattle is not only small in the Netherlands. The supply is also not large in Germany. In 2021, 1,3% fewer cattle were slaughtered in Germany than a year earlier. The supply of slaughter bulls in particular was considerably smaller at 4,1%. A total of 1,19 million slaughter bulls were processed. The supply of cows for slaughter was slightly larger than a year earlier. This increased by 1% to 1,12 million units. Due to lower slaughter weights, the total beef supply decreased by 1,8% to 1,07 million tonnes. The smaller supply from our eastern neighbors creates extra competition for Dutch slaughterhouses to get enough animals.