Beef market could see 'greater stability' next year, report says

Beef prices could improve on the current experience of small week-on-week declines, the report says
Beef prices could improve on the current experience of small week-on-week declines, the report says

The beef market could witness 'greater stability' next year following the easing of short term economic and supply impacts, a new report has suggested.

New analysis of data underpinning supply and retail trends predicts the longer-term picture for beef prices could improve on the current experience of small week-on-week declines.

Hybu Cig Cymru-Meat Promotion Wales (HCC) said several factors contribute to the present, almost weekly, marginally lower adjustment in prime cattle prices.

These include increased short term domestic supply, increased imports of Irish cattle and sluggish retail demand, the levy board said.

HCC analysis executive, Glesni Phillips said: “It must be remembered that this is against a background of climbing farmgate prices over the past few years and especially since 2020, therefore the baseline average remains significantly higher than historical averages.”

She said the beneficial effects of these higher prices had been “somewhat negated by rising key farm input costs for beef producers, that have been fuelled by huge inflation rates, which had put pressure on the profitability of businesses”.

Deadweight prices for steers opened the year close to £4.90/kg, peaked at £4.95 at the start of March but each week since has seen decline to the current near £4.77/kilo.

Heifers and young bulls have also followed this course, with heifers currently around £4.74 (-7p year-or-year) and young bulls round £4.68 (-9p yoy).

The cull cow marked has bucked the trend, with largely positive price movements to stand at around £3.59/kilo – some 45p higher than the average recorded during the first week of January.

Looking at supply, available data indicates that the slight increased numbers of prime beef cattle and dairy males aged 12-30 months will continue in the short term,.

Potential supply up 2% on the year at around 1.8 million head as of April 1, 2024, according to the British Cattle Movement Service (BCMS).

However, breeding herd trends over the past decade show a notable decline, largely due to a combination of economic, policy, technological, and environmental factors putting pressure on both the beef and dairy sectors, the report said.

“These include, high production costs, market volatility, changes in government subsidies, various TB restrictions, and pressures surrounding environmental impacts have all put pressure on the industry,” Ms Phillips explained.

“This has been partially mitigated by technological advancements and better herd management practices and beef production has been relatively stable despite these herd contractions.

“In the longer term – looking at the end of this year and into 2025 – these factors are expected to impact domestic supplies.

"GB data suggests the potential supply of prime beef cattle and dairy males aged 0-12 months is down three per cent on the year at 1.9 million head of cattle.”

Ms Phllips added this reduction in youngstock numbers was to be expected as calf birth registration numbers in GB last year fell more steeply than in previous years.

“We’ve seen this trend continue into quarter one of 2024, which suggests that supply further down the line will remain tight.

“These contributing factors all add up to the likelihood of greater market stability as they filter through towards the end of 2024.”