Despite market prices suggesting otherwise, Dutch cattle prices are under pressure, according to market insiders. Both slaughterhouses and traders agree on this. This is the result of both a weak meat market and a plentiful supply of dairy cows.
The quotations of the major livestock organizations contrast with the prevailing market picture. This isn't yet reflected in the quotations of Livestock & Logistics. Prices are stable across the board, and there was even an increase at the beginning of the year. Prices rose across the board. A decline may still follow, as the quotations of Livestock & Logistics reflect market developments with a delay.
Meanwhile, the German VEZG is even more optimistic. Our eastern neighbors are much more optimistic. German prices have increased by 5 cents per kilo each week for the past three weeks. O-quality rose from €5,80 per kilo to €5,95 per kilo.
While prices are showing an increase, market insiders tell a completely different story. Slaughterhouses report significantly lowering dairy cow prices. Prices have fallen by around 30 cents per kilo since the new year, according to market reports. This is due to a substantial supply of cattle for slaughter, partly due to the falling milk price.
Since milk prices fell sharply, the supply of dairy cattle has been quite substantial. Around Christmas, the supply dipped slightly, but since January, many farmers have chosen to send less productive cattle to slaughter. As a result, slaughterhouses and traders are reporting oversupply. While slaughterhouses report being full, traders are reporting difficulty selling the available stock.
Beef market weak
In addition, according to both traders and slaughterhouses, demand for meat is low. This is quite typical for January. Demand for beef decreases in that month due to changing consumption patterns. Consumers spend less on food and are therefore more likely to opt for chicken. Although this is an annual pattern, the dynamics are stronger this year than usual. High consumer prices are causing an especially sharp decline.
Demand for ground meat is also not very strong. Although prices are clearly under pressure, they still appear to be simply too high for many consumers. Furthermore, many consumers are focusing on a healthier lifestyle in January. This has a negative impact on sales of products like meat scraps, while poultry meat is once again benefiting.
Beef cattle remains expensive
Despite the lower meat prices, beef cattle remain expensive. The reason is simple: supply remains quite limited and can practically always be placed immediately. Market insiders indicate that prices in the beef cattle segment stabilized well before Christmas, and that doesn't seem to be stopping any time soon.