UK beef profitability among lowest in the world

Global cattle, pigs and potato futures markets along with share prices have plunged since the beginning of the year, while British on-farm physical commodity prices are largely unchanged.

By the first week of March, the EEX April 2020 potato futures price had fallen by 44 per cent and although prices in many European countries fell, British values have actually increased by 8.0 per cent in that time.

It is a similar picture for beef and pigs, with declines on the futures market more in line with a 28 per cent drop on stockmarkets than any changes in physical prices.

The Chicago CME live cattle and lean pigs April futures prices both fell by 21 per cent between January 1 and the first week of March, while British deadweight prices were virtually unchanged and Australian beef prices up nearly 60 per cent.

There has been less volatility on the grain markets, although March futures are lower than in January with British prices holding up, although that has been driven by the anticipated small 2019 harvest.

“The most recent US wholesale beef prices are trending down and there has been a fall in fresh fish and seafood prices,” said Michael Nesbitt, a market analyst at Farmers Guardian’s sister business Urner Barry.

“There is so much uncertainty about and physical prices for a whole range of products could be impacted by logistical issues, disruption in production or processing or consumer stockpiling.”