Prime cattle prices have drifted lower over the past month but remain historically high for this time of year with an increase of around 10% compared to 2020, according to Quality Meat Scotland.
Prime cattle prices typically drift lower through February and March, although in 2020 they remained stable, said Stuart Ashworth, QMS director of economic services.
In contrast, Scottish cull cow prices have firmed seasonally over the past month and stand some 6% higher than a year ago, with a similar pattern has been followed in England and Wales.
“After picking up in January, prices in the Republic of Ireland have also begun to soften over the past month, with a rising sterling leading to a more significant fall when quoted in pence per kilo," he said.
"Like the UK, Ireland is also reporting a tighter supply of prime cattle, with Bord Bia reporting that over the first seven weeks of 2021 prime cattle slaughter numbers fell 12%, with the gap widening progressively each week."
However, more generally across Europe, young bull prices have firmed slightly in February and are around 3% higher on the year when quoted in Euro.
Prime cattle prices have drifted lower despite fewer prime cattle reaching abattoirs than this time last year.
Defra slaughter statistics show the typically weekly prime cattle kill in January 2021 to have been 2% lower than in 2020.
"Indications from price reporting abattoirs are that this level of decline has continued through February," Mr Ashworth added.
"With carcase weights little changed then the volume of domestic prime beef on the market will have fallen slightly in line with lower slaughter numbers.
"Cow slaughter volumes have also decline in January compared to a year ago but cow carcase weights have increased but insufficiently to offset reduced slaughter volumes.”
For farmgate prices to drift lower while the volume of domestic beef has declined slightly suggests a cooling in the retail market or a switch to cheaper retail cuts and mince.
Mr Ashworth said this was often the case at this time of year, reducing the overall value of a carcase.
However, he said it should be noted that the retail market made a firm start to the year in January, with Kantar data showing that GB household spending on beef grew at its strongest rate since May.
He said this was likely to be providing continuing support to farmgate prices relative to last year.
“International trade data for January and February is not yet available but it is clear that in coming to terms with Brexit that beef exporters are facing administrative challenges and the volumes exported are reduced as a consequence.
“Nevertheless, there is some evidence that there was an increase in beef exports during December ahead of Brexit to the highest levels seen for several years which could have allowed lower exports in January as all parties adjusted to the changed trade administrative requirements,” Mr Ashworth said.
He explained that reduced slaughtering in the UK and Ireland could be a consequence of Covid-19 control measures reducing the capacity of abattoirs to handle cattle and carcases.