UK keeps up beef price pressure on EU

UK beef prices remain competitive, maintaining pressure on key EU markets, including Ireland, according to Quality Meat Scotland (QMS). 

Prime cattle prices stayed stable and firm over the past month and continue to be around 3-4% higher than last year, QMS reported.

Over the past couple of years, prime cattle prices had peaked in mid-September, said Stuart Ashworth, QMS head of economics services. Prices have then typically started to ease as the number of cattle presented for slaughter increases as a result of some producers deciding to sell cattle off grass prior to housing.

The trend over the past two years has been a dip in prices through October, followed by an increase through November.
 
“However, evidence from BCMS [British Cattle Movement Service] suggests that the volume of cattle on Scottish holdings for sale in the short-term remains constrained,” said Ashworth.

“The move to selling lighter, younger cattle, particularly steers, has impacted on cattle numbers. Average carcase weights for steers killed in Scotland during August were 5kg lower than last year and the numbers killed slightly higher.” Heifer slaughter numbers also increased as carcase weights fell, he said.

“As a consequence, there are fewer over-two-years-old prime cattle on holdings. Nevertheless, as we move towards the end of the year, increasing numbers of cattle born in the first half of 2016 will reach the market.”

Scottish calf registrations in this period were 0.5% higher than the same period in 2015. Meanwhile, in England and Wales, the growth in calf registrations in the first half of 2016 was higher, at 1%. “Although not dramatic, this should suggest a slight increase in the slaughter volume from this cohort in the medium term,” said Ashworth.
 
“However, in the short term the reduced numbers of older cattle on farms is constraining supply. The English June census, for example, shows a decline of 3.5% in male cattle over two years old and 0.5% in females not identified as in the breeding herd, before volumes of younger cattle begin to build up.”

Falling carcase weights and tighter cattle supplies meant that, over the first eight months of 2017, the UK produced 2% less beef, creating some space for imports – an opportunity seized by Ireland, observed Ashworth.

“However, while UK cattle prices are higher in sterling terms, the weakness of sterling means in euro terms our price is lower than last year by some 3%.
 
“As a consequence, Irish exporters have seen some pressure on prices in the face of a more competitive UK market. With prices also lower than a year ago in major beef exporting countries like the US, Australia and Brazil and much lower than the EU average prime stock price, it seems likely that Ireland is finding exporting beef to be more competitive than last year. Indeed, Irish producer prices are lower than last year by around 1-2%.”

In contrast, Ashworth added, in many parts of Europe, including Germany, France, Italy and Spain, producer prices for young bulls and heifers were higher than they were a year ago.

However, steer prices, which are dominated by the UK and Ireland, are lower than a year ago. Nevertheless, UK prime steer and heifer prices remain some of the highest in Europe and the world.  

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