LMC Report: Improved Beef Demand In January

UK - Over recent weeks the farmgate beef price has been under some pressure with some factories reporting reduced demand. While demand in February may well be weak (we will have to wait another few weeks for the figures) demand in January was much improved on previous years.
calendar icon 12 March 2010
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The Bulletin has previously reported that beef demand typically peaks around the turn of the year and then gradually declines throughout spring before the seasonal low during the summertime. This year appears to be following a similar trend with beef demand hitting a 12-month peak in Dec ‘09 and Jan ‘10. However, it is also clear from the data, that demand was much stronger this January than in the same month for any of the previous three years. This is welcome news given the concern about weak demand during the recession (i.e. in 2009).

In the four weeks ending 24th Jan 2010, 28,000 tonnes of beef were sold in GB, representing an eight per cent increase compared to the same period last year. With average retail prices up by one per cent or 4p/kg this January compared to last January, this led to a significant increase in expenditure. This January, expenditure on beef in GB was estimated to be £167m, up from last year’s figure of £154m.

The increases in demand in January were driven by increased demand for all beef cuts with the exception of roasting joints. There was a 26 per cent increase in demand for stewing beef and a 17 per cent increase in demand for frying and grilling cuts. One important driver for the increased demand in January was the cold weather right across GB, with anecdotal reports in the press of consumers cooking more traditional dishes such as stews and hotpots. The figures for the longer “last three month period” to the end of Jan ‘10 are also encouraging with demand and expenditure up by two per cent compared with the same period a year ago. This increase was driven by increased demand in Dec ‘09 and Jan ‘10 compared to 2008/09.

Analysts are predicting a weak and fragile recovery from recession with forecasts that beef demand will continue to be subdued. With this in mind, the figures for January are positive signs and may provide some indication that demand has at least stabilised. On the other hand however, it could be the case that consumers have temporarily shifted their buying patterns due to the unusually cold weather in January.

Sources in GB have been reporting poorer demand this February and this has been reflected in comments from local plants. When available, the Kantar data for February will provide another indication as to how GB beef demand is performing as the economy emerges from recession.

Further Reading

- You can view the full report by clicking here.

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