Cattle supplies set to tighten in 2014
According to research by Quality Meat Scotland (QMS), cattle supplies are set to tighten throughout 2014, easing pressure on farmgate prices.
As the number of cattle reaching slaughter age reduces, supply should begin to tighten, QMS reported. Additionally, the organisation said the market would benefit in the short-term from an additional 60,000 24-30 month-old cattle on British farms. However, calf registrations were down on last year, according to government statistics, showing Scottish calf registrations in the first quarter to be down 6.5% - the decline was reflected across the UK with overall calf registrations down 2.8%.
QMS head of economics services, Stuart Ashworth explained: “Just under half of these additional cattle are female and some will be destined for the breeding herd, particularly dairy herd expansion. Nevertheless, there is a short term availability of cattle still weighing on farmgate prices.
“To re-coup the Scottish decline of the first quarter would require calf registrations during April and May to increase by over 4%. Despite quite a number of cows calving later than usual as a result of being slow to settle in calf last summer, this would seem unlikely. The legacy of 2013 is not only seen in calf registrations this spring but also in the population of cattle under 18 months old on British farms.”
Ashworth added: “Across GB as a whole the number of cattle under eighteen months old on farms was 3% lower at the beginning of April than last year. There is also a small decline in cattle aged between 18 and 24 months on GB holdings this April. This points quite clearly to a tightening in the number of cattle reaching the slaughter stage as the year progresses.”
The past quarter has also been tough for meat exporters, said Ashworth with beef deliveries running well below last year’s levels.
“A small increase in beef imports and various other small factors have collectively had an impact and resulted in the UK home market being well supplied over the past quarter leading to price pressure.” In the short term, therefore, the UK beef market looks well supplied.
“However, cattle numbers look set to tighten as the year progresses and more favourable general economic data is pointing towards improving consumer confidence,” said Ashworth. “Accordingly, the supply and demand pendulum is likely to swing in favour of the supply side of the equation as the year progresses.”
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