Buoyant beef trade looks set to continue

Beef producers can be reasonably confident prices will remain strong well into next year, as keen demand chases generally tight supplies.

Finished cattle prices have come back slightly from their peak earlier in July, but remain well above last year, while auctioneers say the store trade also remains very firm.

Latest EBLEX figures put the average deadweight price for R4L finished steers at 348p/kg, unchanged on the week but 30p/kg above the same week in 2011. On a liveweight basis, the average finished steer price this week was up slightly on the week at 191p/kg, with finished heifers at 195p/kg and young bulls 184p/kg.

“Prices have eased a little since R4L steers went through 350p/kg deadweight about three weeks ago, but it’s not really anything significant,” said EBLEX senior analyst Debbie Butcher. “The big picture is still one of firm prices and there’s no reason to suggest that’ll change as supplies remain tight.”

EBLEX forecast UK beef and veal production would total 892,000t this year, down 5% on 2011. Exports were also predicted to fall from 174,000t to 152,000t as a direct consequence of less domestic beef available, Ms Butcher said. Currency fluctuations could affect the value of returns to producers, but were not really affecting trade patterns, she added.

Tony Thompson from Thirsk auction market said numbers coming forward were down on last year, although trade was being influenced by the catchy harvest weather. Overall cattle prices at the 2 August sale were 10-15p/kg liveweight up on last year, with heifers averaging about 214p/kg and steers nearer 208p/kg.

“Certain abattoir firms have tried to reduce the base price, but it’s not in any way affecting liveweight prices,” added Michael Thomas from Ludlow mart in Shropshire, where overall prices of 200-220p/kg were 15-20% ahead of last year.

“A lot of this is due to the bottom-end prices, such as for Friesian bulls, coming up, rather than the top-quality cattle getting any dearer.”

Butchers’ heifers at Monday’s (6 August) sale averaged 210-230p/kg, while supermarket steers achieved 195-210p/kg, butchers’ bulls 195-205p/kg and Friesian bulls 160-170p/kg.

The positive outlook for prices will provide some comfort to farmers considering whether to pay the current high prices for store cattle, although with costs also higher, care must be taken to make sure a margin can be made.

“The stronger end of the store trade is typically fetching £900-1,200 a head, and when you consider it could cost £300 to finish them, it doesn’t leave a lot of room for any margin,” said Mr Thompson.