Prime cattle prices restored

There could be a possible “mismatch” between the price of beef and volume available this Christmas. 

The news comes after Quality Meat Scotland (QMS) reported that the price of prime cattle has lifted compared to the past three years. 

Since 2014, the price between the start and end of November has been around 2-3p/kg deadweight (dwt). However, this year has seen it rise 7-8p/kg dwt on average. 

“The lift in this year’s price for cattle grading R4L is slightly lower, at 6p/kg dwt, so perhaps not surprisingly, the higher lift in the average price than the specific R4L grade suggests a higher proportion of premium grades in the overall kill,” commented Stuart Ashworth, head of economic services at QMS.

The Scottish red meat organisation also highlighted that the current prime stock price is lower than it was in late September.

Ashworth said: “We have to go back to 2014 to find the last time that the end-of-November price was higher than the end-of-September price.

“Equally, over the past four years, the end-of-November price has been the seasonal high point as beef required for 28 and 21 days’ maturity will have been laid down for the Christmas trade.”

In the final week of November, 7% more steers and 19% more heifers were processed in price-reporting abattoirs compared to the first week of the month, due to the increase in farmgate beef prices.

Despite this, the volume of beef produced in late November is likely to have been 1-2% lower compared to last year.

“If the major retailers are planning for similar volumes of beef to last year being purchased over the Christmas period, then there is some potential mismatch between supplies and demand and some upward pressure on price,” warned Ashworth.

“However, over the past few Christmases, Kantar Worldpanel market research analysis shows there to have been some slow year-on-year increase in retail sales of beef roasting joints. Retailers will have taken this into account as they order beef from processors and that may also have influenced demand.”

Lamb outlook

Meanwhile, the same analysis revealed a growth in demand for lamb roasting joints over the Christmas period over the past few years. However, there was a slight struggle last year for this demand to be prolonged.

“In many parts of Europe there is firm consumer demand for lamb over the Christmas festival period as well,” said Ashworth. “This consumer behaviour will have contributed to increases in farmgate lamb prices. In three of the last four years there has been a sizeable seasonal lift in prime lamb prices through November to the second week of December before losing a little ground into the new year.”

Current prices of lamb have increased above those of last year, as there has been a bigger supply of prime lambs, which are benefiting from a lift in price.

When the new year approaches, it is likely that Scottish prime cattle supply is going to remain tight compared to recent years. Using calf registrations from two years ago, QMS analysed that the pool of two-year-old cattle to draw from in early 2018 would be at best unchanged compared to last year.

If some cattle have already been sold younger than in previous years because of carcase size considerations, however, that supply pool will already be diminished.

Furthermore, availability of prime lamb in early 2018 is also looking to be higher than last year. The June census data for Scotland and the UK represented a larger lamb crop, while provisional slaughter data from June through to October showed a significant decline in lamb slaughtering. Although indications are that the November kill has been larger than last year, there is likely to be an increase in hogg carryover. 

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