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Agribusiness News July 2023 – Beef

3 July 2023

Finished beef price falls

Over the past month, finished beef price has significantly dropped, sitting at 499p/kg/dwt, for the week ending June 17 for Scottish R4L grading steers. The takeover of ScotBeef, is arguably to blame however increased supplies in recent weeks and reduced demand due to hot weather as consumers re-evaluate their meat buying habits opting for processed meat and BBQ foods, are also impacting trade. Irish imports to the UK have increased with there being a 40p/kg price difference between UK and ROI, which has also contributed to a price drop. Future processing demand in the coming weeks, will depend on ROI prices, as more cheaper Irish beef could be imported to keep UK prices managed.

This dip in the finished price has come at a bad time for those short-keep finishers starting to sell their more expensive stores bought in the spring, as before this price fall many were needing around 520p/kg/dwt to cover costs. At the current beef price, these undoubtedly will leave no margin.

With less housed cattle available, and grass cattle unlikely to be ready until late August, and concerns over grass availability due to lack of rain and hot weather, numbers look to be tight in the coming months as there does not look to be a significant rise in numbers becoming available. Young bulls have helped processors to make up the shortfall in cattle numbers over the past months, however by the end of July, in keeping with the time of year; it is likely many will have been traded.

Hot weather impacts

Forage availability, due to lack of rain may start to have an impact on store cattle prices. With some bigger store sales scheduled for July, finishers could look to pay less for stores or choose not to restock at the same level, in an attempt to recoup some loss suffered on the back of trading these dearer March and April bought cattle and concerns of grass. Who is having rain is likely to drive trade and prices. Demand is likely to still be with the short-keep heavier types.

Cull cow trade remains strong although back 2-7p/kg depending on outlet, the hot summery weather is boosting sales of burgers and other BBQ foods. Trade may well drop off slightly in the coming weeks as imports rise and numbers coming forward from the dairy industry, increase supply. Those with cows to go should sell now rather than wait.

We are still without clear policy direction from Government, however, at the Royal Highland Show, QMS set out its new five-year strategy, which will include genomics, brand integrity, and securing funding for a verification system for the eating quality of Scottish red meat proteins.

Abattoirs in fewer hands

After weeks of speculation, ScotBeef announced its sale to ABP, with the sale expected to be complete by the end of July. The takeover continues the consolidation of meat wholesalers actively seeking prime cattle in Scotland, however not a reduction in the number of cattle required to meet retail demand.

With three companies now controlling much of the beef process in the UK, there is apprehension among producers; time will tell if this will have significant implications for cattle prices.





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