Beef sector warns falling prices may lead to fewer cattle

Many livestock farmers are facing losses on finished cattle as beef prices continue to decline.

With prime beef dropping to below £6/kg deadweight, finishers who purchased store cattle last year when prices were at their peak could now be losing up to £400 a head.

The beef price has dropped by more than 20p/kg in the past month alone, with beef sales struggling at retail and plenty of fat cattle available in the short term.

See also: Tight margins for UK beef sector as cattle prices decline

NFU Scotland (NFUS) has raised concerns that a sharp fall in prices could trigger potential declines in the suckler herd and reduce long-term investment in the beef sector.

Duncan Macalister, vice-president of the NFUS, said: “At a time of volatile and rising input costs, fluctuations in beef prices pose a significant risk, particularly for store finishers.

 “While store producers have benefited from strong demand, finishers are unable to recover purchase costs in the finished trade as deadweight prices soften.”

He added: “Short-lived price spikes followed by sharp corrections do little to build confidence for long-term investment. Stability and transparency are what the sector needs.”

As concerns grow across the industry, the National Beef Association (NBA) has written to UK processors and retailers, calling for commercial support and transparent pricing to reflect the true cost of production.

NBA chief executive Neil Shand said: “Farmgate prices have fallen again, and the impact on producers is immediate and painful.

“Every drop in price chips away at confidence, erodes the national herd, and pushes more family farms to question whether they can keep going.”

He added: “Producers have carried the risk for too long. We have absorbed soaring input costs, extreme volatility, and constant pressure to deliver more for less.

“We have kept cattle on farms, kept beef on shelves, and kept the supply chain moving through some of the most turbulent years in living memory, but we cannot continue to do this alone.”

The NBA says processors and retailers need to recognise that a sustainable supply chain cannot be built on the backs of farmers, taking all the risk while everyone else protects their margins.

“If the national herd continues to shrink, the consequences will be felt by every part of the chain,” added Mr Shand.

The Ulster Farmers’ Union (UFU) has warned that farmers in Northern Ireland are worried that prices could soon crash towards the £5/kg mark, with cattle backing up on-farm due to limited space at abattoirs.

The UFU said rising volumes of imported beef and weakening consumer demand was weighing on the market, and warned there could be long-term implications for the domestic suckler herd and food security.