Beef prices in the mults look set to rise next year amid a significant tightening in UK supply and record high farmgate prices.
AHDB’s GB R4L steer price – known as one of the key indicators of the sector’s average base price – hit 514.9p/kg in September, some 5.4% up on the same time last year and 34.2% higher than in September 2020.
This marked the highest price ever recorded in the category.
It reflected strong demand for beef, suggested AHDB senior red meat analyst Hannah Clarke. “Supply for 2024 to date is also up year on year and we’ve seen more cattle slaughtered,” she added.
Defra slaughtering data for steers was up 2.9% in volume terms during September, while total beef and veal production was up 3.9%.
But despite strong demand, the overall cattle population was nonetheless contracting, Clarke warned, “with the number of young stock down for next year”.
“Our latest forecast is for a 3% drop in UK prime cattle slaughter numbers for 2025, driven by a fall in suckler-bred calf numbers, as the industry contends with falls in subsidy and general profitability issues,” Clarke said.
Her comments echoed warnings from Hybu Cig Cymru/Meat Promotion Wales during the summer, which noted a “combination of economic, policy, technological, and environmental factors was putting pressure on both the beef and dairy sectors”.
The Welsh beef sector was “in jeopardy” due to “serious shrinkage” in cattle supply, it argued. The body cited British Cattle Movement Service data showing the number of calves for beef production in Wales fell 24.5% in the first half of 2024.
“Assuming stable consumption, current production forecasts would suggest an increased requirement for imported product next year to meet demand,” AHDB’s Clarke said.
These market dynamics could ultimately drive up prices in the supermarkets across the beef category and impact on currently buoyant demand, one meat company boss told The Grocer.
Beef retail sales volumes were down 2% last year, on the back of a 9.7% increase in average unit prices, according to NIQ data for The Grocer’s Top Products survey.
“Europe is really short of cattle too, and many farmers are struggling to produce cash to stay afloat,” they warned. “The sector has already been contending with rampant inflation and we’re going to see strong retail price increases in beef next year.”
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