Beef and lamb prices have remained strong, resulting in some cautious optimism for producers, although in such a volatile market it would be foolish to rule out the prospect of clouds on the horizon.
Liveweight prime cattle prices are more than seven per cent higher than a year ago, according to AHDB, and have been as much as 15 per cent above last year in recent weeks.
Deadweight beef prices were 14 per cent higher than a year ago at the end of August, at an average of 374p/kg for steers.
Liveweight lamb prices are a fifth up on last year, with deadweight values up 13 per cent at 444p/kg.
The high beef prices have come despite higher than normal levels of slaughtering.
During August, 213,150 cattle were slaughtered in Great Britain, according to Defra/AHDB figures – 5.4 per cent more than in August last year.
Since the beginning of March, throughput has increased by 3 per cent to 1.147 million head.
Sheep throughput is down 8 per cent since March, with a 1.2 per cent drop in August slaughtering to 1.330 million head.
Duncan Wyatt, senior analyst at AHDB, said: “We are expecting cattle numbers to tighten over the next few months, especially as slaughterings were higher than expected earlier in the year.
“Numbers are also tighter in Ireland and we expect pressure on supply to remain into the new year, although a lot of calves will eventually feed through into the system.”
Scottish prime cattle finishers have seen substantial recovery in market returns from the low point of the late April Covid-19 market disruption.
Only twice in the past decade, in 2013 and 2017, have farmgate cattle prices been higher at this time of year.
Stuart Ashworth, director of economics services at QMS, said: “The UK has one of the highest producer prices for beef across Europe and the world, and the gap has widened in the past quarter.”
He suggested this would make the UK an attractive export market for European countries, but there was little evidence UK imports of beef have increased in response, with reports imports were lower in the first half of 2020 year on year.
“Lower demand from out of home eating, a sector which is sensitive to the cost of materials used in meal preparation, is likely to have reduced demand for imported meat,” he said.
He added firmer prices in June and July may have drawn cattle on to the market sooner, with carcase weights over 4kg lighter in July than the same month last year and 3kg lighter than in June.
Scottish calf registrations in 2018 were 2.5 per cent lower than in 2017, suggesting the current pool of slaughter age cattle is likely to be smaller than a year ago, which will impact on supplies through to the end of 2020.