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Agribusiness News May 2023 – Beef

1 May 2023

Prime Cattle Price Continue Upwards

April saw a continued rise in the beef price, with demand continuing to outstrip supply.  For week ending April 15 prices quoted for an R4L animal were 504p/kg deadweight.

Supplies continue to tighten

Cattle numbers continue to be tight and are set to tighten further in the coming weeks, as many sheds are now emptied.

As we have alluded to previously, Scottish slaughter data shows a downwards trend, with QMS reporting for week ending April 15 an 18% reduction (compared with the same week last year) in kill numbers in Scottish abattoirs.  This is no doubt bolstering finished price.

Recording Breaking prices

Record-breaking prices with store cattle surging past £3/kg and a £5/kg base price from processors has led to some positivity among beef farmers.  However, finishers have had to pay more for forward cattle compared with last year, meaning more money, is tied up in fewer cattle.

Many of the cattle bought recently for slaughter in May and June will need to gross over £2,000 per head to leave a reasonable margin, according to finishers.

A fall in cereal prices over recent weeks will have been welcomed as finishers restock after an expensive winter.

With tightening supplies, out of spec cattle are once again being rewarded, with a blind eye being turned to weight limits in order to maintain supply.

The outlook for beef remains positive for the coming months, as tight supplies and strong competition continue to support firm cattle prices.

Store Cattle

Wet, colder weather continues to slow down stock turnout to grass; with forage stocks diminishing, the shine has been taken off lighter cattle in the store ring.  Despite this, markets are still reporting increases week on week.

Short-term stores remain a flying trade and very much in demand.  With store cattle prices at record levels, many have been sold earlier than normal to take advantage of the prices.  It is expected that the availability of heavier stores will reduce further in the coming weeks.

As we move into summer, the weather will be a crucial decider in demand levels and subsequent pricing.

Cull Cows

Cull cow trade continues to exceed all expectations, driven by UK demand for manufacturing beef as consumers look for cheaper beef options.  Beef mince is affordable and versatile and is now rivalling chicken on value.

With a drop in milk prices, more dairy cows may come forward which will support consumer demand as we move into BBQ season and a number of bank holiday weekends.

With breeding cattle sales kicking off, it will be interesting to see where the demand for breeding heifers is after the last six months of increased cull cow sales.

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