Beef prices surge in major boost for agricultural industry
By Rob Blair, Partner and ARA specialist
In a significant development for the agricultural sector, beef prices have shown a strong rebound. This is excellent news for farmers, especially those in the beef production business.
Key drivers of the price surge
Tighter supplies
One of the main factors contributing to the rise in beef prices is the tighter supply of cattle. Throughputs of prime cattle at UK abattoirs have decreased during the summer months, and total beef and veal production is down by 1 per cent for the year to date.
Sustained retail demand
On the consumer front, GB household beef purchases have remained strong. The total spend on beef was up by 11 per cent for the 12 weeks ending 3 September, indicating sustained retail demand.
The numbers
GB deadweight prices have been on an upward trajectory. As of 23 September, steers averaged 479.3p/kg, up by 24p/kg since mid-August. Heifers averaged at 476.5p/kg. This marks an almost 40p/kg increase in deadweight averages compared to last year.
Auction and retail trends
Prices have also seen an uptick in live ring auctions, with auctioneers reporting strong trade, particularly for well-finished, heavier cattle.
Industry forecasts
According to AHDB senior analyst Hannah Clarke, the population of 12–30-month-old cattle is expected to increase slightly during the autumn, suggesting greater supplies for beef production for the remainder of the year. However, British Cattle Movement Service (BCMS) data shows a 0.9 per cent decline in the total GB cattle herd compared to last year, and calf registrations were down by 2 per cent.
International perspective
In Ireland, beef prices have been less buoyant and are currently at a significant discount to GB prices. This has made Irish imports increasingly attractive to British retailers, with fresh beef imports from Ireland up by 6 per cent during the first seven months of the year.
Financial planning tips
Budgeting – Factor in the rising beef prices into your revenue forecasts.
Diversification – Consider diversifying your cattle portfolio to include well-finished, heavier cattle that are fetching higher prices.
Contact us today – For a comprehensive financial strategy, consult with our expert team who can guide you on financial matters.