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Pressured beef prices not improving retail sales

Despite beef prices falling, the retail demand for the meat is not rising as might be expected.

Joel   Durkin

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Joel   Durkin
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Farmgate beef prices are declining and retail sales are not rising
Farmgate beef prices are declining and retail sales are not rising

Demand for beef at retail level continues to struggle despite pressure on farm prices.


Stuart Ashworth, head of economic services at Quality Meat Scotland, suggested while farmgate beef prices continued to drift downward, this was not prompting retail demand as might be expected. He added it was an issue affecting other meats as well as beef.


“I think it is an overarching challenge rather than simply a beef challenge,” he said. “Lamb prices have improved, but the exchange rate has driven that, and pig prices are on the floor. I get a feeling the whole retail trade is finding it hard.”

 

Difficult trading with supermarkets


Mr Ashworth said despite some economic arguments that consumers currently had more money, processors were claiming it was difficult trading with supermarket outlets.


With expectations of large numbers of cattle in the coming months, Mr Ashworth suggested this could keep a lid on farm prices. But he was quick to make distinction between cattle numbers and total volumes of meat.


AHDB underlined these comments, pointing to beef’s ‘ongoing malaise’. Figures to March 5 showed average prices fell more than 1p to 326.8p/kg.

 

’Malaise in the trade’


Debbie Butcher, senior analyst for AHDB, said: “Given that broadly the same numbers of cattle were processed compared to the week earlier, the movement again demonstrates the ongoing malaise in the trade.”


Despite the ongoing issues in beef prices, Defra figures to December 2015 showed the suckler herd rose on last year by about 5,000 to 700,000 head.

 

Livestock numbers rising


Livestock numbers generally were also on the rise in Scotland, which rural affairs secretary Richard Lochhead said was a positive move for the industry.


“The overall rise in livestock, including the increase in beef cattle, dairy cows, poultry, sheep and pigs, is very encouraging following a decline in many of these in 2014,” he said.


He claimed it was encouraging the Scottish Government’s coupled support schemes appeared to be generating sector confidence.


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