Higher retail demand and lower production helps boost cattle prices

Volumes have fallen 3% in the first third of the year compared to 2016
Volumes have fallen 3% in the first third of the year compared to 2016

Cattle prices have been boosted in recent weeks due to slightly lower production and a higher retail demand.

According to figures from Kantar Worldpanel, volumes have fallen 3% in the first third of the year compared to 2016.

Abattoirs in England and Wales, which had seen lower stock availability in the first quarter of 2017, are now seeing more plentiful supplies.

The recent move to a slightly increased supply in England has not, however, constrained the market, observed Stuart Ashworth, Head of Economics Services with Quality Meat Scotland.

English producers also seeing current prices 12% higher than last year and 10p/kg dwt higher than at the end of March.

Census data and data from BCMS would suggest that this scenario of tighter male cattle supplies while heifer supplies remain more stable within Scotland is likely to continue through the summer, said Mr Ashworth.

Change in the balance of trade

Mr Ashworth said there has been a change in the balance of trade for beef.

“With the exception of December and January, Sterling’s weakness since the Brexit vote last June has contributed to lower imports of beef into the UK.

“Furthermore, increases in farmgate prices in Ireland over the past three months have resulted in Irish prices currently sitting 2% above a year earlier compared to 1% lower at the end of March.

“This has combined with Sterling weakness to further reduce the attractiveness of Irish imports.”

Lower production, lower imports and slightly improved consumer demand has meant that, despite currency exchange weakness, in Euro terms UK beef prices are higher than last year.

This has contributed to UK exports of beef in the first quarter of 2017 failing to match those of 2016.