Agribusiness News July 2024 – Beef

Marginal lift in finished price

Sluggish retail demand and higher than expected throughputs in April and May coupled with the availability of young bulls has done nothing to install confidence in finishers over the past six weeks as finished beef prices have fallen and remained low. For week ending 22^nd June prices for Scottish steers hitting the R4L spec were sitting at 484p/kg/dwt. Prices have increased 2p from the first week in June – is this a sign that as reports suggest, beef prices are set to lift as cattle numbers coming forward look to tighten? There are concerns however that instead of lifting prices, processors will simply reduce slaughter days, unless beef sales increase. How much retail demand there will be is yet to be seen as demand generally drops throughout the summer, as with school holidays and the Covid bubble now burst, there looks to be more consumers holidaying abroad.

The current beef price is undoubtedly seeing finisher margins squeezed. The drop in fat price has come at a bad time for those short-keep finishers, starting to sell off their more expensive stores bought in the spring, which at the current beef price, will not have covered feed costs.

Price rows

Beef cattle prices have come under scrutiny recently, with reports highlighting price differentials in Scotland as much as 15p+ per kg between prices quoted to individual farmers and those given to levy boards. With concerns over future supplies (beef calf registrations in GB for the first three months of 2024 are back 2.3% compared to 2023), what the industry needs is a system that ensures everyone receives a fair price, allowing prices not to fall below a certain level which will help build confidence in the marketplace when purchasing stores. 

Store cattle

Trade for store cattle remains strong, in line with the time of year numbers forward are less, which is contributing to the price of stores. With some bigger stores sales scheduled for July, what is needed now is for the finished price to jump back up or finishers could look to pay less for stores and or not restock at the same level to restore some of the margins lost on the back of trading those dearer March and April bought cattle.

Cull cow remains strong

Cull cow trade continues to sit around 400p/kg deadweight. The weather has not helped lift prices, however going forward it is hoped that the Euro football tournament and improved summer weather will see consumers get the BBQ going. Those sitting with cows to sell should be getting these away at current prices, as the price tends to drop as we head into autumn.

In most years, the cow availability starts to increase as we head into the autumn, with scanning and housing, with this increase in numbers the price tends to dip so if there are still cows out there ready to kill, get them away at this high trade.

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