Prices increase for Scottish cattle

Latest analysis from Quality Meat Scotland (QMS) has shown that Scottish cattle prices have displayed some seasonal growth. 

Current prices are sitting around 10p/kg deadweight higher than they were in April, although, according to QMS, producers are still receiving on average around 6p/kg deadweight less than they were 12 months ago.

“Prices have shown some strength, despite abattoirs being reasonably well supplied with cattle,” said Stuart Ashworth, QMS head of economics services.

“April slaughter statistics show the Scottish prime cattle kill was 1.6% higher than in 2015. Since then, price-reporting abattoirs have continued to report higher throughputs than last year.

“Some of the price increase may be due to more consumer interest in selected beef cuts as the weather improves and some due to fewer cattle falling outside the premium pricing specifications, lifting the average price, but not the premium product price.”

He also said that the volume of cull cows reaching abattoirs was significantly higher than last year, particularly in England and Wales. Despite this, the carcase weight of cattle has been lower which could be an add-on effect of the challenges facing the dairy industry.

“Although this adds volume to the total domestic beef supply, cull cow prices have also shown some strength over the past month,” added Ashworth. “They have risen around 7p/kg dwt, suggesting an underlying demand pull for beef in recent weeks.”

International trade has been acknowledged as providing some market support to the sector. “Although suffering a time lag, UK customs data shows an 18% increase in exports between January and the end of April, while imports fell 3%. The net trade effect was therefore a reduction in domestic beef supplies of almost 3% from last year over the first four months of 2016.”

Scottish abattoir production of prime beef in April increased by a larger percentage than the cattle throughput, signalling that Scotland was responding slower than the rest of the UK in terms of what is demanded from carcase weight.

“In contrast, beef production from prime stock across the UK as a whole fell in April despite an increase in the kill numbers, reflecting a decline in carcase weights in England and Wales,” said Ashworth.

“Typically slaughter weights in Scotland are at their highest in late spring and lowest in the autumn.

“In the coming months we will see the proportion of 2014 born cattle in the Scottish kill decline and the spring 2015 born calves increase in volume as the autumn progresses. It remains to be seen whether changes to finishing objectives will result in Scottish carcase weights from these 2015-born cattle beginning to fall below year-earlier levels.”

The comparison between slaughter volumes with cattle populations is an indication that there may be a switch to slaughter at a younger age.

The number of cattle aged between 24 and 30 months old on farms in April of this year was lower than in 2015, although the number of cattle aged between 18 and 24 months was little changed.

Furthermore, the number of cattle aged 12 to 18 months saw a significant increase, according to QMS.

Prime stock slaughter numbers in price-reporting abattoirs are holding up and this, according to Ashworth, suggested an earlier draw in the 18- to 24-month pool, which should flatten the supply curve going forward.

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