Beef: international comparisons
AHDB are part of the agri benchmark international network of 35 member countries who submit data for suckler herd and beef finishing “typical” farms.
This is an internationally standardised method of identifying and analysing typical farms representing typical production systems and their profitability, at farm level, in each country. The results are expressed in US Dollars (USD) as the international comparison base. For more information visit the agri benchmark website.
The UK trades and competes in a global market and is therefore affected by exchange rates as well as any competitive cost of production. The countries in the charts are representative of the UK’s main competitors and the exporting environment for commercial beef.
The farms in these charts are ranked in ascending order of total returns because, globally, farmers tend to have little control over their market price.
Cash costs include all paid expenses and non-cash costs include the value of family labour, rental value of owner-occupied land and depreciation.
Returns do not include decoupled payments typically received by some farms, such as the EU land-based payments, nor the returns from other enterprises on the farm.
The numbers after the country name are the number of cows typically put to the bull each year. For the UK farms, UK-70 is a lowland farm in the South West who finishes the weaned calves on farm. UK-100 is a typical upland farm in North Yorkshire that sells the calves at weaning.
Returns will include the value of calves at weaning as well as cull or breeding cow sales.
The numbers after the country name are the number of animals typically finished off farm in a year. The left-hand part of the chart shows the finishing enterprises of many of the suckler herds shown in the previous chart because these farms, for various reasons, finish their home-bred calves.
The right-hand side of the chart shows farms who are finishing animals they have purchased. These animals may have been purchased as calves, (e.g. UK-90 beef cross dairy calves), or purchased as stores and kept for a short finishing period. This would typically apply to the feedlots such as BR-5000 and US-75k.
International Sirloin and Mince Retail Price comparisons
The UK retail market currently prices mince and top cuts slightly differently than other countries, including those operating in the global beef market. Among the countries surveyed in the agri benchmark network, only Switzerland had a higher sirloin to mince price ratio.
This begs the question, what will this difference mean as the UK becomes more exposed to the world market? Perhaps the UK will be able to compete with the likes of Australia, Ireland and the US on mince prices, but may find itself priced out of the steak market. An increase in mince exports, without a corresponding rise in steak sales can bring carcase balance challenges. It may well be that the difference between the mince price and the prices of those top cuts, will narrow in the future. That could return value to the producer by way of the carcase price, while at the same time allowing UK steak prices to be competitive.
Consumers in countries such as Australia and the US only have to pay double to 'trade up' from mince to steak - may this be one of the reasons why steak is eaten more often in these countries and their overall beef consumption is greater than the UK?
Consumption in the UK expressed as kg of beef per capita is 18kg - this compares to 20kg in Ireland; and 26kg in both Australia and the US.
The chart below shows the retail price in each country of minced or ground beef and sirloin steak expressed in British pounds. It also illustrates how much extra a kg consumer must pay to trade up to purchase a steak instead of mince as a meal solution.
The mince price is a combination of standard and premium mince where both are found in the comparable countries. This usually reflects the fat content with standard mince having a higher fat content than premium, which is usually around 5% fat.
The impact on carcase value and balance is obvious and compounded when we consider that around 50% of beef in the UK is consumed as minced beef.