Beef
The latest prime cattle prices have recently shown a week-on-week increase after falling for most of the summer. Although prices have been comfortably above year-earlier levels for the whole of 2023, the rises throughout the spring have almost been eroded. Since the end of May, the GB deadweight All-steer price has fallen from 494p per kg for the week ending 20th May to 455p per kg on 12th August. In the week ending 19th August, the price rose by 1.7p per kg on the week, the first rise in 12 weeks. It is too early to say if prices have now stabilised, but why have we seen such a decline?
Domestic demand has fallen due to the cost of living crisis. According to Kantar retail data, volumes of beef sold through GB retail has been below 2022 levels since the start of the year. The unpredictable summer weather as further impacted sales of burgers and grills. Although beef volumes in the food service sector has been positive, this has been more than off set by the decline retail. This picture is similar on the Continent, with consumers reducing spending and this is expected to continue for the rest of the year, according to European Commission forecasts.
The pressure on prices has been further exacerbated by an increase in supply. Not only have UK slaughterings inceased, but imports of Irish beef started to rise in May, following several months of lower volumes. Furthermore Bord Bia is forecasting Irish cattle slaughter to increase in the final quarter of the year. However, overall supplies will be less than in 2022, when the kill was particularly high. But not only have volumes increased, the price of Irish cattle has also fallen, placing downward pressure on UK prices. Irish cattle prices are reliant on the export market and with reduced demand on the Continent (see above) prices have fallen. British cattle usually trade at a premium, but this drop in the Irish price is pulling down GB prices as well. This could affect a recovery in markets into the autumn.
Lamb
The new season lamb trade appears to be stabilising just ahead of last year’s levels, following its seasonal decline. The GB liveweight SQQ for the week ending 19th August was 261p per kg compared with 239p per kg for the year earlier. Similar to beef, domestic demand has weakened as consumers switch to cheaper proteins, but so far this year prices have been supported by export demand. Shipments in the first quarter of 2023 grew by 22% year-on-year. Supplies have tightened on the Continent due to declining production and product from Australia and New Zealand being diverted to the Chinese market. If this continues, domestic prices should remain supported.