Farmers share of the retail beef price in the UK has improved in recent months, according to latest figures from the AHDB.
It says that with a notable strengthening in cattle prices over the past few months against levelling retail prices, the gap between the two indicators has narrowed.
In August, the AHDB says the producer share of the final retail price was calculated to be a fraction short of half, two points up on the month earlier and five points more than in the low point of the year so far in April, when farmgate prices were under significant pressure.
As this trend has been consistent throughout the summer, it says it may seem like some positive news, especially as the producer share is above year-earlier levels for the first time this year.
However, the AHDB also says that it is worth remembering that the producer’s share of the final retail price still remains some way behind the previous five-year average (2011-15), which is around 53%.
Also, it says it is important to point out that the increase over the past four months does come on the back of the producer share in April being at its lowest point in around 10 years.
Outlook
Looking ahead, the AHDB says that the improved outlook for the short term suggests that the finished cattle market may well continue to respond to tighter than expected supplies, lower imports and improved export opportunities.
It says while a great deal will depend on the evolution of retail prices, the better farmgate price outlook could well result in producers attracting a modestly more favourable share of the retail price in the coming months. However, whether or not it stays ahead of last year’s position remains to be seen.
However, it warns whether or not it stays ahead of last year’s position remains to be seen.
