Unexpectedly low demand for beef has led to a fall in UK beef prices - even though supplies of British beef are actually tightening.
Data published by Quality Meat Scotland (QMS) reveals prime cattle prices have drifted downwards over the past six weeks, at the same time as cattle slaughterings are down across the UK year on year.
“What we are arguably getting at the moment is a sliding price at the same time as we have a sliding supply,” says QMS head of economics services Stuart Ashworth.
There has been a noticeable slowdown in demand for manufacturing beef, which is putting pressure on wholesale prices for forequarters, he adds. Retail demand for beef has also been “subdued”, according to Eblex senior analyst Debbie Butcher.
Indeed, abattoirs are reportedly turning away cattle, with waiting lists stretching to several weeks long in some areas.
Ashworth suggests some of the gap between demand and price could be explained by an increase in carcase weights, which have boosted beef volumes despite the drop in cattle slaughterings.
It is also possible the current strength of sterling is making Irish beef a more attractive option than British. According to QMS, January trade data shows UK beef exports fell while imports increased.
Butcher says the drop in prices might even be seasonal, and could indicate some return to normality after the horsemeat scandal in 2013 and last year’s glut of supply from Ireland.
Beef prices are likely to stay subdued in the short term, but Ashworth and Butcher agree the downward spiral is unlikely to continue longer term, with tightening supply in the UK and Ireland bound to force market prices to rise again.
“Broadly speaking we are predicting a less well supplied market,” says Butcher.
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