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Dairy culling weighs on beef market

Experts believe dairy farmers are beginning to cull less productive animals as the industry downturn continues


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Beef prices are being hit by increased supplies of dairy-bred cull cows coming to market due to the dairy sector downturn.

 

Last week cow numbers were up on the week to more than 10,000-head, with British Cattle Movement Service data suggesting most of this increase was due to greater numbers of dairy animals.

 

This increase in cow numbers has coincided with a sharp fall in beef prices.

 

Speaking about dairy producers, Debbie Butcher, market analyst at AHDB Beef and Lamb, said: "I think as the summer comes to an end people will look at housing and feeding costs."

 

Ms Butcher said much of this meat would go for manufacturing beef, which was often exported. She said the exchange rate meant it was currently a struggle to ship this overseas, suggesting it was contributing to price pressure.

 

In the week to August 1, the GB deadweight cow price fell back 8.6p/kg to 224.8p/kg and this continued in the live rings. In the week to August 5, liveweight cows fell 5.7p/kg to 123.4p/kg.

 

Rob Harrison, NFU dairy board chairman, underlined Ms Butcher’s comments about dairy producers.

 

Last month, Mr Harrison told Farmers Guardian as autumn approached more would look at cutting costs and getting rid of their least productive animals.

 

This week he suggested this process may have begun.

 

"It is people who are desperate for cash," he said. "Some parts of the country are very wet. It makes sense to get rid of your least productive animals."

 

The prime beef sector is also seeing continued pressure from slow retail demand due to summer.

 

In the week to August 1 GB steers meeting specification fell back 4p/kg to 361.1p/kg.

 

"The summer is a notoriously difficult time for prime beef," Ms Butcher added. "When people are barbecuing they are not eating those prime Sunday roasts.

 

"We are selling a lot of added value products but people are not [buying] a topside or joint."


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