Supply and demand for prime cattle starting to even up
Prices for prime cattle look to be stabilising following a redressing of the balance between supply and demand.
According to Quality Meat Scotland (QMS), the number of prime cattle arriving at abattoirs have been lowering however prices have continued to fall.
Stuart Ashworth, QMS head of economics services, said that in the week ending 23 May, Scottish price-reporting abattoirs handled almost 8% fewer cattle than last year and English and Welsh abattoirs nearly 4% fewer.
He said: “The stabilisation of prime cattle prices and a modest increase for some grades suggests that the demand side of the equation has now firmed. Delays in getting cattle into abattoirs are reportedly shortening, suggesting that processor requirements have picked up. Nevertheless, producer prices remain some 4% lower than last year, having fallen 10% since the turn of the year.”
Ashworth expects stock numbers to continue to be low for the next six months before supplies grow again, going on BCMS data.
“2013 saw miserable spring weather have a telling effect on mortality and calf growth and also impacted on cow condition at mating for the spring 2014 calf crop,” he said. “This evidence suggests that this tightness of supply, compared with last year, will continue for the next six months or so.
“This same BCMS data shows the current population of cattle under one-year-old to be higher than last year. So, as these cattle reach 18 months of age towards the end of 2015, abattoir supplies will inevitably recover.”
It is not just UK prime stock numbers that are tightening. In Ireland, prime stock slaughterings have been almost 10% lower than last year with forecasts from Bord Bia suggesting that the Irish kill during 2015 as a whole will be more than 100,000 head lower than in 2014.
Alongside this change in stock availability, Irish farmgate prices have also steadied, he said.
Across Europe as a whole, forecasts for beef production in 2015 show cattle availability down 0.5%.
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