Agribusiness News December 2024 – Beef

Record Beef Prices

With under four weeks to go until Christmas Day, processors are battling to secure beef to meet demands for Christmas retailer orders.  As a result, beef cattle prices in Scotland are continuing at record levels, with the demand for beef ahead of the festive period continuing to outstrip supply, contributing to price momentum.

Kantar retail data from the start of November showed an increase of 2.5% spend on beef products year-on-year, with figures from QMS showing cattle prices to be 26% higher than the five-year average for week ending November 9, again highlighting the current strong consumer demand.

For week ending November 16 prices in Scotland, R4L steers were sitting at 540p/kg/dwt, up 6p per kg dwt from the previous week, with Aberdeen Angus sired cattle achieving considerably more to supply premium retail outlets.  With Christmas fatstock show and sales taking place across the country; marts are reporting strong demand from butchers and abattoirs ringside.

 

Post Christmas

Looking beyond Christmas, traditionally, finished prices drop.  However, predictions are that values will remain firm into January.  Simply, there are not the number of finished cattle out there to bring values down, as the pressures of a reduced 2023 calf crop is looking to peak during spring 2025.

While higher finished prices have led to better returns in the short-term, however the continuing trend of declining cow numbers remains a huge concern for the industry.

Culls Values and Store Cattle Values Strong

Trade for cull cows is also continuing positivity, with strong demand seeing prices remaining on an upward trajectory.  Usually, prices drop at this time of year as processors focus on prime cattle.  However,  demand for processing meat remains strong with cows trading significantly higher than this time last year and well above the 5-year average.

Store cattle trade also remains firm, with many marts reporting an increase in store cattle values throughout November.  Store cattle prices look set to remain strong in coming weeks.  Phenomenal finished beef prices and lower feed prices are contributing to the current buoyant store trade.

Forward Thinking

Following the recent budget announcement, farming businesses are under further pressure to improve business and herd efficiency.  The 2024/25 edition of the Farm Management Handbook (funded by the Scottish Government) is now available to download free of charge on the Farm Advisory Service website.  Providing a comprehensive and up-to-date source of information for farmers, including gross margins, now is the time to consider your business needs and plan for the year ahead.

Although the autumn budget focus has largely been on agricultural property relief and inheritance tax; from an employer’s National Insurance perspective, we must also consider the implications for abattoirs next April.  Abattoirs and Processors employ large numbers of staff.  With operating and overheard costs substantially increasing, will the additional costs be passed down to suppliers?. However, with cattle numbers tightening and suppliers going where the price is best, can abattoirs and processors  actually afford to pass their costs on?

Sarah Balfour, Sarah.balfour@sac.co.uk