Don’t expect a huge lift in price of beef, says QMS
A massive lift in the price of beef this year is not to be expected, according to Quality Meat Scotland (QMS).
The lack of such an increase, at a time of year when producers and prime finishers are looking for a rise in market prices, is due to poor inflation this year, QMS said.
According to head of economics services at QMS Stuart Ashworth, there is a general perception of a significant move in price in the run-up to Christmas. However, he said: “The biggest movement in recent years was in 2010, when the average price increased by 5% between the beginning of November and the second week of January.”
Through looking at the prices over the past few years, Ashworth suggested that 2010 was an unusual year, which saw prices rise by 2.8% during November. He added: “In 2010 prices rose 2.8% during November and kept rising through to January, but you have to go back to 2006 to see a similar increase during November. It is much more usual to see a rise of 1-1.5% during November, while in 2007 cattle prices actually eased over the course of the month.
“The picture is equally mixed through to the beginning of January. In 2011-2012 the price fell between December and January, as it did during the three Christmas periods in 2005, 2006 and 2007.
“So the continued increase in price during December and into January seen in 2010 looks unusual. The more typical scenario is an increase of 1-1.5% during November followed by a further slow increase of up to 1% through December before prices ease back into the New Year.
“So what is happening this year? Over the first fortnight of November the average steer price in Scotland has lacked direction, increasing in the first week of November and falling in the second week,” added Ashworth
The apparent lack of Christmas spirit is not surprising, said Ashworth, which he put down to consumer caution.
According to the Office of National Statistics, the general annual inflation rate increased to 3.2% during October, while food price inflation ran at 3.1% compared to 1.9% in September.
Ashworth also said that although producers might not see a Christmas lift similar to that of 2010 or 2006, they could seek comfort in seeing a deadweight prices of around 361p-362p/kg, which is 5% higher than the same time last year and at a record high.
Ashworth said: “The challenge for the producer, of course, is to contend with high input costs, in particular feed, at a time when the requirement for purchased inputs has increased, due to slower livestock growth rates. The effect has been compounded by the reduced quality and available volumes of many of the main inputs required for livestock production.”
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