Agribusiness News October 2024 – Beef

Record High Scottish Prime Cattle Prices

Finished beef prices in Scotland throughout September have increased steadily, driven by a seasonal dip in supply and strong demand from both domestic and international markets. For several months now, reports have pointed towards prime cattle values rising amidst tightening cattle supplies, with this now coming to fruition with prices in increasing by more than 7% in the three months since June.

During the second week of September at Scottish abattoirs R4L grade steers reached £5.17/kg/dwt, a 5% increase compared to the same week in 2023.  Based on a 370kg carcase, finishers were receiving over £1,900, around £150 greater return than the previous month.  Prices have continued to surge upwards with prices quoted for the week ending 21 September for R4L steers sitting around £5.23/kg/dwt (+7p from the week previous). Prices quoted for Angus sired cattle are around £5.30/kg/dwt.

Looking ahead, it is anticipated that prices will remain strong. Competition is fierce among finishers to secure cattle, with numbers simply not there due to the Scottish beef herd declining. Tightening supplies will continue to drive prices upwards as processors look to stock up for the festive period.

Strong Demand for Store Cattle

Store cattle trade remains strong with many markets reporting a rise in values with several producers reporting an increase of £100/head on the year for cattle traded in recent weeks. While this is positive and needed for suckler producers after a long winter, finishers will not see it that way. After having to fork out for expensive stores earlier in the year, with these leaving little, if any, margin when slaughtered; there could be those who are cautious when buying stores, in case finished beef prices drop. There are also concerns in some areas of straw price and availability, which will also impact finisher margins.

Initial weaned calf sales have also been strong, with sale averages of over £3.40/kg. With many suckled calf sales due to take place in the coming weeks, auction marts across the country are anticipating that there will be good demand for suckled calves with feed prices lower and more simply, cattle numbers are less, so there is competition to secure cattle.

Demand for Scottish-born stores is expected to remain strong among finishers across the UK, as a reduced calf crop in autumn 2023 and spring 2024 means that there may not be the numbers coming forward at upcoming autumn sales.

Unseasonal Lift in Cast Cow Values

Demand for processing beef continues to be strong, with cows trading at a premium at Scottish abattoirs over England & Wales. Cull cow prices have risen in recent weeks despite a seasonal rise in numbers slaughtered which usually pressures prices downwards. However, it is anticipated that cow values will drop going forward as numbers forward for slaughter increase significantly post weaning.

Unseasonal Lift in Cast Cow Values

Recent data released by ScotEID, quoted a reduction of 8,400 beef cows in the past 12 months. An increase in herd dispersals throughout Scotland in the summer contributed to this with reasons for dispersal including lack of labour, no succession and concerns about business profitability linked to investment needed to adhere to Government regulations. Despite this, it is encouraging that many of the herd dispersal cows were sold into other suckler herds, with larger numbers of cows on farm, producers are aiming to spread their fixed costs thus reducing the cost per cow.

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

Scotland prime cattle prices (p/kg dwt) (Source: drawn from AHDB and IAAS data)