Troubled Beef Market

Prime beef prices continue to fall as a result of the current supply/demand imbalance.  Eblex’s GB all steer deadweight average price for April 2013 was 400.43p per kg.  In the week ended 10^th May 2014 this was down to 346.5p per kg.  It appears producers may have held cattle back as prices fell around Christmas, this has increased supply since then which has been met with a slump in demand.  The retail price of British beef has increased significantly over the last couple of years.  Demand, quite surprisingly, had remained pretty robust but consumers appear now to be switching to cheaper meats.  This is borne out by figures from Kantar Worldpanel.  Whilst these show shoppers’ spend on beef in February and April was up by just over 3% on the year this has been driven by an increase in the price of beef, which has increased by nearly 8% compared to year earlier levels.  In contrast volume sales have actually declined over the period by 4% year on year.

In the short term there doesn’t seem to be any let up on the downward pressure.  There is still further potential for increased supplies although thenumbers of yarded cattle coming forward should be slowing down.  Processors appear to be full and there is talk of delays in getting cattle into abattoirs.  This means that specifications can be missed when those animals eventually are slaughtered.  In addition, Irish beef is also coming onto the market at prices lower than domestic beef costs of production.

Looking further ahead, availability towards the end of this year and into 2015 is looking lower, according to BCMS data in April.  This could have positive price implications.