Lower carcase weights drives Scottish beef prices

Farmgate prices of Scottish beef are an estimated 13% higher than this time last year, according to analysis from Quality Meat Scotland (QMS). 

Stuart Ashworth (pictured), head of economics for QMS, said that prices were being supported by a lower availability of prime cattle in Scotland compared to last year, and lower carcase weights.

While the availability of prime heifer has changed little, the numbers of steers and young bulls has fallen.

“This reflects the consequences of [a trend] towards lighter carcases, encouraging earlier marketing of male cattle,” explained Ashworth.

“Indeed, latest estimates show a decline in the carcase weight of steers between March and April, a time when historically carcase weights increase. Average steer carcase weights during April in Scotland were reported as 387kg, 10kg lighter than last year and 4kg lighter than March. Heifers produced carcases 3kg lighter than last year during April.”

Juxtaposing the Scottish market, abattoirs in England and Wales are seeing more plentiful supplies of cattle, although prices in England are still 12% higher than last year and 10p/kg deadweight higher than at the end of March.

Ashworth noted that tighter male cattle supplies and stable heifer supplies were likely to remain across Scotland throughout the summer. Data also suggested that the trend relating to stock originating in a dairy herd was less marked than in the beef herd.

“Equally, though, the English market is likely to remain slightly better supplied than last year. Census data showed an increase of 3% in one- to two-year-old males on English farms last December, while in Scotland there were 3.5% fewer,” explained Ashworth. “Similarly, there was a 2.6% increase on one- to two-year-old female cattle on English farms last December compared to a fall of 1% on Scottish holdings.”

The changes to slaughter numbers and carcase weights has meant that, over the first third of 2017, domestic beef volumes have fallen around 3% compared to last year. Although there is lower physical production of beef in the UK, research from Kantar Worldpanel has shown that there has been some modest growth in retail demand, both for prime cuts and added-value beef products, compared to this time last year.

In addition, Ashworth explained there had been a shift in the balance of trade for beef.

“With the exception of December and January, sterling’s weakness since the Brexit vote last June has contributed to lower imports of beef into the UK. Furthermore, increases in farmgate prices in Ireland over the past three months have resulted in Irish prices currently sitting 2% above a year earlier, compared to 1% lower at the end of March. This has combined with sterling weakness to further reduce the attractiveness of Irish imports.”

In euro terms, UK beef prices are higher than last year because of lower production, lower imports and slightly improved consumer demand. Subsequently, UK exports of beef in the first quarter of 2017 fell compared to 2016.

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