Cattle prices strengthen further on tight supply

Deadweight cattle prices have breached the £4/kg mark once again, AHDB figures show.

In the week ending 31 July, the GB all-prime cattle average rose by 1p/kg to reach 405.1p/kg.

Prices rose across all prime classes.

See also: How a beef farmer is achieving £416/ha gross margin

Liveweight

Liveweight cattle prices have not fared as well, with steers, heifers and young bulls all showing slight week-on-week declines, according to auction market figures.

The drop is most likely explained by a big jump in numbers. In the seven days to 31 July, all prime cattle numbers rose by 21.3%, while values fell by 2.5p/kg to total 225.7p/kg.

Heifers had the largest week-on-week decline, falling by 4.3p/kg to 237.3p/kg, while steers fell by an average of 1.3p/kg to 229p/kg.

More recently, at Rugby Farmers Mart (RFM) on Monday 2 August, prices peaked at 263.5p/kg for a Limousin steer, while heifers topped at 255p/kg.

Tom Wrench, auctioneer at RFM, said there was a flying trade throughout as wholesalers feel the pinch of cattle shortages.

Cows

Cull cow prices fell by 1.4p/kg to average 292.4p/kg deadweight for the week ending 31 July. Throughputs were up slightly on the previous week, but remain below last year’s levels.

In contrast, liveweight cull cows were up both in volume and value on the previous week, averaging 144.4p/kg, up by 2.8p/kg.

Market sentiment

The main market drivers for cattle prices are reported to be tight supply and firm demand at wholesale.

Industry reports have suggested the food industry is considering retail price increases, which may be driving this demand at wholesale level.

Despite the supply of cattle coming forward being up on the previous week, total throughputs remain down for the year.

Looking at longer-term supply trends however, AHDB head of market specialists Chris Gooderham said: “Although year-to-date prime cattle kill is down on last year (-3%) we mustn’t forget how unusual 2020 was. Slaughter for 2021 so far is estimated at 989,000 head.

“This is slightly above the levels recorded in each of the years from 2016 to 2019, and is, therefore, also above the five-year average, albeit by only 0.3%.”