Cattle Prices Start Year on Firm Footing15 January 2013
SCOTLAND - The first full week of trading after the festive period has seen cattle prices remain firm as processors restock chills, according to Stuart Ashworth, Quality Meat Scotland, Head of Economics Services.
The infamous post Christmas consumer blues may mean a switch to lower-priced retail beef products and some change in carcase balance which may impact on income for processors. However, observed Mr Ashworth, the fact remains that these same processors continue to comment that cattle supplies remain tight.
“Clearly supplies have been influenced by slower cattle growth rates as a consequence of the poor weather and feed quality.
“For most of 2012 producers have reacted to higher prices by seeking to sell heavier cattle, however as the year drew to a close carcase weights began to fall as did the age at slaughter.
“This suggests the driver for finishers has increasingly become the challenge of feed quality, quantity and cost rather than market price,” said Mr Ashworth.
As with the sheep sector, the slower growth of animals will have led to some increase in cattle numbers on farms. However, he observed, unlike the sheep sector the basic pool of UK cattle of potential slaughter age - those one to two years old last June - was unchanged on the year.
“Indeed the number of male cattle declined while females increased which may suggest retentions for breeding. So, although fewer prime cattle have been killed in the last six months they have not added significantly to the potential pool of stock available for slaughter. Thus by historic standards the supply of prime cattle will remain tight over the medium term,” said Mr Ashworth.
However, the UK June census did report a two per cent increase in the number of cattle under one year old.
“These cattle are likely to begin to emerge onto the market in the second quarter of 2013. An increase in numbers does not, however, necessarily mean an increase in production - that will be determined by carcase weights.”
In Scotland the increase in cattle numbers later in 2013 may be greater than across the UK as a whole. Certainly the number of calves registered two years ago increased by a greater amount in Scotland, up 1.6 per cent, than for GB as a whole which declined by 0.5 per cent.
Equally, while there has been some increase in exports of cattle to English and Welsh holdings during 2012 (up about 3 per cent) this increase in live exports was not sufficient to offset the increase in calf registrations.
However, it is important to consider the context of the wider marketplace in which Scottish beef producers operate.
“Looking at the bigger picture, European Union beef production is expected to decline in 2013 compared to 2012 hence the small increase in animal numbers in Scotland, less than 8000 head, is unlikely to prove of significance in price determination,” Mr Ashworth added.