Retail Beef Prices Soar as Producers Hold Tight

UK - History has shown that no one sensible throws away seed corn when there is a chance of a good harvest and so beef famers must be cautious about cashing in their breeding cows, no matter how attractive the price, at a time when supply shortage is poised to push prime cattle prices well above the levels needed for an averagely efficient business to survive.
calendar icon 14 January 2009
clock icon 3 minute read

So says the National Beef Association, which is worried that after years of struggle many breeders will see yet another surge in the value of cull cows as an opportunity to bail out with a degree of comfort instead of recognising it as one of many signals that beef production is about to move above the profit line and breeding females will soon be almost as scarce, and as expensive, as gold dust.

“The signals covering long term survival are good. Even though other parts of the UK economy are in recession retail beef is at least 20 per cent more expensive than it was this time last year and tight prime cattle supplies are, for many reasons, expected to continue to thin down dramatically as the year progresses,” explained NBA director, Kim Haywood.

"Other parts of the UK economy are in recession retail beef is at least 20 per cent more expensive than it was this time last year"
NBA director, Kim Haywood

“All of this points to average deadweight prices across the UK soon topping the important 300p per kilo mark and the average value of an unproductive cow should be significantly above 200p on the average recorded at the end of last summer.”

“In these circumstances it is important for even the weariest of the UK’s embattled beef farmers to take a cool look at their future prospects and see these important market improvements as a clear sign that much smoother economic waters lie ahead instead of regarding them as a green light to quit beef farming altogether.

Among the factors that will push up 2009’s slaughter cattle prices is the recent 20 per cent decline in the strength of sterling against the euro – which will make it difficult for imports from the Republic of Ireland to be purchased at their habitual steep discount at the same time as UK beef exports become more price competitive.

“Previous decisions on the culling out of more breeding cows in 2005, 2006 and 2007 will reduce future home produced prime cattle supplies still further and so little surplus beef is moving through international export routes that it is impossible to see how retailers, and cutting plants, will be able to make up the shortfall,” said Ms Haywood

“And on top of this a 15-18 per cent drop in domestic production has been forecast for this coming autumn as a result of the dramatic drop in beef cross calf numbers coming out of the dairy herd following the huge swing to Holstein inseminations in September 2006.”

“Only a handful of these additional Holstein bull calves have been reared and their numbers are well short of making up for the missing British Blue and Limousin crosses that there is increasing agreement that from August onwards there will be a precipitous decline in domestic slaughterings and competition for those prime cattle that are still available will be unusually fierce.”

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