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Manufacturing beef demand boosts prices

There was strong demand for manufacturing beef in the UK and on the continent


Alex   Black

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Alex   Black
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Manufacturing beef demand boosts prices

High demand for manufacturing beef has driven English and Welsh cull cow prices 12 per cent higher year-on-year, with prices recording week-on-week increases throughout January.

Scottish cull cow prices were 10 per cent higher year-on-year, despite higher throughputs.


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AHDB red meat analyst Rebecca Oborne said strong UK and European demand had helped support prices.

 

And with supermarkets still driving the low-price, value-for-money message, Quality Meat Scotland (QMS) highlighted the importance of having a range of markets to maximise carcase income.

 

Prime

 

Scottish prime cattle prices eased towards the end of January, but ended the month 3 per cent higher than last year.

 

In England and Wales, the deadweight prime steer price measure was just under 2 per cent higher year-on-year, with cull cow prices around 12 per cent ahead.

 

Ms Oborne said while UK demand was strong, supply was just ahead.

 

“Some industry reports suggest some processors think supply may be just behind demand during February,” she said.

UK beef prices were 0.6 per cent higher in euro terms, while Ireland reported an increase of 6 per cent, France 3 per cent and Germany 7 per cent.

 

Stuart Ashworth, QMS head of economics services, highlighted Kantar Worldpanel data which shows a seasonal switch to mince and stewing beef in January and February, as consumers looked to manage their budgets.

 

This meant it was not unusual for prime stock prices to drift lower.

 

“Last year it was not until mid-March that the drift lower halted,” said Mr Ashworth.

 

With consumers expecting food inflation in the near future, Mr Ashworth said this could offer support for producer prices, but some supermarkets had suggested inflation would reduce in 2018.

 

Retail


“It continues to be difficult for processors to pass higher farmgate prices through to their retail customers. Consequently, it is important to have a range of market outlets to maximise carcase income,” he said.

 

Growth in ready meals highlights the importance of food manufacturing customers, he added.

 

“Indeed, imports of frozen beef, most likely to be used by food manufacturers, has increased during 2017 suggesting growth in this segment,” said Mr Ashworth.

 

He added the export market was also crucial with current exchange rates and rising prices in Europe aiding UK exporters.

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