Scottish calf registrations increase but firm prices set to stay
Scottish calf registration data from the first third of 2020 shows significant growth of 5% over the same period of 2019, according to the latest market commentary from Quality Meat Scotland (QMS).
The data also reveals that total calvings in the first third of the year are at their highest level for more than a decade.
There has, however, been a slow increase over the decade in the proportion of annual calvings occurring in the first third of the year.
For Scotland, in 2019, the proportion of the annual total calvings occurring in the first third of the year was 46% compared to 44% a decade ago, as the importance of the dairy herd has slipped.
According to Stuart Ashworth, QMS director of economics services, this trend explains some of the increase, nevertheless, what the registrations also show is a continuation of changed breeding herd management.
“While total calf registrations have gone up, dairy sired registrations have gone down,” said Ashworth.
“Although the December census suggested a decline in the Scottish dairy herd of 1%, the number of dairy sired registrations in the first third of 2020 has fallen faster.
“This suggests a greater use of sexed semen for breeding dairy replacements, increasing the potential to expand production of beef crosses from the dairy herd,” he added.
The registrations also show a continuing growth in the use of native breeds to almost 30% of all registrations – an increase of almost 50% in the past decade.
“Although there has been growth in registrations in popular continental beef breeds in the first third of 2020, the largest growth has been in Aberdeen Angus sired registrations,” said Ashworth.
According to Ashworth, it will be eighteen months before this increase in stock numbers will reach an abattoir. In the meantime, previous falls in calf registrations will continue to mean lower availability of slaughter stock in comparison to year-earlier levels for the medium-term.
“The number of one to two-year-old male cattle in the Scottish December census showed a decline of 5%, while heifers fell 1% leading to an inevitable tightening of prime stock through 2020,” said Mr Ashworth.
However, slaughter data has shown an increase in prime cattle reaching Scottish abattoirs so far this year, with a 1% lift in the opening five months of the year, while data from the price reporting abattoirs indicates that this has continued into June.
Firm consumer demand leading to an increase in purchases through high street food stores and butchers, has undoubtedly contributed to a firming in farmgate beef prices and is likely to continue.
However, according to Ashworth, many questions remain over the short-term demand for all meats. AHDB’s weekly retail tracker has already indicated some slowdown in the growth of GB household spending on beef in June following a very strong May; though demand for burgers has continued to out-pace overall retail spending on food and drink.
“The slow re-opening of food service adds competition for meat but may reduce supermarket requirements as people revert to old behaviours.,”
“The slow re-opening of food service adds competition for meat but may reduce supermarket requirements as people revert to old behaviours,” said Ashworth. “Increased opportunities to spend money on leisure and recreational pursuits as the summer progresses could also bring challenges.
“Also hanging over the market is the future of furlough schemes as well as the potential growth in unemployment and reduced incomes that may bring,” he added.
Meanwhile, on the supply-side, the Irish processing sector has returned to full capacity in June after a sharp reduction in slaughter through April and May, potentially adding some competitive pressures to the overall beef market.
Looking at Kantar Worldpanel data of consumer sales of fresh and chilled beef, historically these hit an annual low though July and August – the summer holiday period.
This year the summer holiday period will be far from normal and implications for the mix of meat products purchased through the summer will also add confusion to the market.
“Statistics from the UK Office of National Statistics indicate that during the whole of 2019 there were some 60m overseas holiday trips by UK residents but only some 17m holiday trips into the UK, said Mr Ashworth.
“If overseas holiday trips are curtailed this summer, as seems likely, then despite a reduction in overseas visitors to the UK, red meat demand should remain firm through the summer,” he concluded.