A testing time for beef producers in 2014
A testing time for beef producers in 2014
Beef producers in Wales and across the UK faced many trials and tribulations during 2014. The sector was presented with significantly reduced prime cattle prices which had a detrimental effect on enterprise profitability and confidence.
Throughout most of the year, GB prime cattle prices were considerably lower than levels experienced in 2013. This disparity was most apparent during the summer months when a week-on-week comparison of deadweight prices in 2014 and 2013 consistently showed a difference of 70p/kg.
Moving into the late autumn and winter months, the situation improved and the GB all prime cattle average price stood at 359p/kg by the last week of 2014. This, however, was still 24p less than during the same time in the previous year, but 34p above the lowest price of 2014.
“Consumer demand for beef was generally subdued last year,” said Charlie Morris, Industry Information Officer at Hybu Cig Cymru – Meat Promotion Wales (HCC). “The industry was also forced to deal with the availability of increased volumes of cheaper, imported beef on shop shelves, thus applying additional pressure on Welsh prices.”
Between January and October 2014, imported volumes of beef into the UK increased by five per cent with 70 per cent of this meat sourced from Ireland.
Domestic production also increased during this time. Exports of beef from the UK rose by seven per cent in the first ten months of 2014.
Miss Morris added: “These export destinations could prove to be valuable outlets for beef from Wales over the next 12 months, particularly as we expect a tightening of supply both at home and abroad.
“Last year, processors applied stricter penalties for cattle that did not meet the stated specification for age, weight, conformation and fat class. As such, it would seem sensible for finishers to consider the requirements of their proposed outlets before supplying cattle in the future. This should ensure that they do not encounter these penalties which can have a significant impact on enterprise margins.”
The outlook for 2015 suggests a reduced supply of domestic and imported beef due to fewer cattle on the ground. This indicates an upward momentum in prime cattle prices in the year to come.
