Retail beef sales remain buoyant, with consumer expenditure rising by 5% in the year to 5 August, according to analyst Kantar Worldpanel. However, higher prices have subdued volume sales.
"Market penetration remains stable, with approximately 87% of households purchasing beef in the latest 52-week period, similar to levels at the same time last year," said a report by EBLEX. Tighter cattle supplies had boosted farmgate prices, contributing to the increased retail prices, but limiting volume sales of product.
"With the home market taking approximately 80% of UK production, domestic consumption remains crucial to returns. As such, the strong consumer spend on beef shows that the higher prices are capable of being absorbed to some degree."
Lamb sales had increased by 13% in volume over the past year, largely driven by a 50% jump in leg joint sales. However, the value of sales only grew by 8%, due to increased promotional activity. "With two-thirds of UK production entering the domestic market, the upturn in consumption is a sign that the consumer is still willing to purchase lamb," said the report. "With global supplies still comparatively tight, especially in the long term, farmgate prices may potentially remain firm."