Rising prices for beef cattle add to pressures on processors

BEEF producers selling their stock are getting record prices, with the £4 per kilo deadweight barrier having been well and truly broken, but Stuart Ashworth of Quality Meat Scotland (QMS) yesterday pointed out the pressure the new high prices were putting on other links in the beef supply chain.

“While this price breakthrough is welcome news for producers, it continues to pile pressure on processors to push these costs through to the retail chain,” said Ashworth.

He added that figures from the Office of National Statistics revealed that over the year to the end of March 2013, retail beef prices increased by an average 2.1 per cent.

“When compared with the 8 per cent movement in farm gate prices from March 2012 to March 2013 and the 12 per cent increase over the 12 months to April, this does suggest retail butchers are struggling to pass on their increased costs to the consumer,” he said.

He attributed part of the increase in farm gate prices to the limited volume of beef currently reaching abattoirs, with March slaughter statistics showing a UK kill of prime cattle which is 6 per cent lower than last year and a Scottish kill down by around 2 per cent.

“Added to reduced cattle availability is the fact that carcase weights have also fallen by 2 per cent. Combine the two and UK prime beef production was almost 8 per cent lower in March 2013 than one year ago.

“Although the number of cull cows reaching abattoirs has increased, they too are producing lighter carcases so cow beef, which represents about 18-20 per cent of all beef, has not filled the gap created by reduced prime beef production.”

Looking forward, he predicted no change from a tightly supplied UK market in the short term.

In contrast. elsewhere in Europe prime cattle prices were, he said, at best stagnating and in some regions of significant production, for example France, Germany and Spain, prices have fallen over the past month.

“As a result the UK and Ireland have some of the highest farm gate prices across Europe which will not make it easy to export beef to mainland Europe. Indeed the opposite may be true,” he added.

“However, with the exception of Poland, all the major beef producing states of Europe are seeing reduced production and, as a result, the European beef market also remains tightly supplied.”