Analysis Milk
Dairy farmers should expect lower slaughter prices
Cattle and calf prices have dropped significantly over the past two weeks. While supply remains low, demand for cattle has fallen even more sharply. This isn't unusual during the holiday season, but there appears to be more to it.
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Dairy cow slaughter prices have dropped significantly. Data from Livestock & Logistics shows that prices across all categories have fallen by 25 cents per kilo over the past two weeks. At the high end of the market, the price for O-quality dairy cows is €6 per kilo. At the low end of the market, for second-quality dairy cows, the price is €3,95 per kilo.
Looking at the calf market, a similar pattern is visible. The price of bull calves fell by €35 to €402,50 per calf, a decrease of 8,7%.
Sharp drop in demand appears to be a tipping point
Beef prices have risen sharply since the beginning of the year. This was due to global shortages. Supply has fallen significantly in recent months, resulting in one record after another. Until now, demand for beef has remained stable, but that has changed in recent weeks. This is partly attributable to the holiday season. Many Dutch consumers travel to Southern Europe during the summer holidays, causing a significant drop in domestic meat sales.
This year, however, there appears to be more to the story. Slaughterhouses indicate that the drop in demand is more pronounced than in previous years. It seems very likely that consumers are avoiding beef since the latest round of retail price increases. Furthermore, strong price pressure from South American steak cuts is putting downward pressure on European meat prices. Market insiders indicate that the reductions will continue in the coming weeks.