The latest market commentary from Quality Meat Scotland (QMS) shows that although cattle prices have cooled over the past month, a rise is expected as demand for beef increases in the run-up to Christmas.
Stuart Ashworth, QMS director of economic services explained: “Although we have seen cattle prices dipping 6-7p/kg dwt over the last month, they also dipped sharply through October last year.
“So, despite recent falls, current prices have once again moved ahead of year-earlier levels to start November 2p/kg dwt higher than last year.”
The number of cattle reaching abattoirs usually climbs slowly at this time of year with the weekly kill reaching a seasonal peak in November.
Figures show that this year is following this trend and growth in supplies will have contributed to this seasonal decline in price.
“The weekly kill of prime cattle through August and September 2018 was lower than last year and despite some increase in the kill through October, supply levels are similar to last year,” said Ashworth.
Christmas uplift
“However, the availability of primestock in the run-up to Christmas may prove to be better than last year as some of these slower finishing cattle come onto the market.”
Christmas buying will be underway shortly and premium beef, often with a 21 or 28-day maturation period, will need to be purchased over the next couple of weeks to meet consumer demand.
Ashworth said: “Demand for beef will be expected to grow in the run-up to Christmas, particularly for the more expensive roasting joints.
Data on retail sales from Kantar Worldpanel typically show that beef sales over the Christmas and new year period can be 2-3% higher than in the month previous, while demand for roasting joints can double.
As a consequence, it is not unusual to see prime cattle prices begin to firm in mid-November before dipping away again from mid-December.
A typical rise over this period during the past five years has been around 2-3p/kg dwt. Last year, the price climb was striking, lifting 7p/kg dwt over November as cattle numbers tightened.
Cull cows
In contrast to prime cattle, the weekly slaughterings of cull cows over July, August and September have been running higher than year-earlier levels. Although, Ashworth explained that this year lighter weight carcases possibly of poorer conformation had been produced.
“Price-reporting abattoirs indicate that the weekly kill of cull cows has continued to run ahead of year-earlier levels through October,” he said.
“As numbers of cull cows increased, prices started to slide particularly through July and August. This has led to a sharp decrease in prices with the current price being around 18 p/kg dwt below last year.
“Imports of frozen beef, more likely to be competing with cow beef for manufacturers interests have also been running higher than last year through the autumn. In contrast imports of fresh and chilled beef have been very similar to last year’s levels,” Ashworth added.
