Beef market outlook

July 2024

• Prime cattle slaughter is forecast to rise by 1% in 2024 overall to 2.06 million head. Cattle population data points to supply reductions in the final quarter of the year. Prime cattle slaughter in 2025 is forecast to reduce by a further 3% versus 2024.
• Combined with a 1% reduction in cow slaughter, UK beef production for the full year of 2024 is forecast at 903,000 tonnes, largely stable (+0.3%) versus 2023.
• Beef imports and exports are expected to remain above last year’s levels by 4% and 2%, respectively in 2024.
• As at 1 December 2023, the UK breeding cow herd was 2% smaller than the year before. Both the dairy and suckler herds contracted, but the suckler herd drove the overall change. Subject to heifer slaughter levels, this points to longer-term domestic beef supply reductions.

GB deadweight cattle prices have been relatively resilient during the first half of 2024. Increased cattle slaughter and growth in import levels have put more supplies onto the market, which pressured prices particularly through the spring. Regardless, prices have persisted at historically high levels so far this year, supported by robust consumer demand, and underpinned by strong cattle prices in Irish and European markets. Globally, prices are experiencing a tale of two halves, with northern hemisphere prices supported by lower US production. Meanwhile, values in the southern hemisphere are pressured by record output from Brazil and Australia.

GB R4L average deadweight steer price

Source: AHDB

Breeding herd

According to Defra figures, contraction of the national cow herd accelerated in 2023. As at 1 December, the UK dairy herd stood at 1.84 million, down 0.5% from the year before. Meanwhile, the suckler herd reduced by 4.4% to stand at 1.33 million. This put the total UK cow herd down 2% from the year before at 3.17 million, the steepest annual reduction seen since June 2009.

Trends in the size of the UK dairy and suckler herds over the past decade

Source: Defra

Robust beef prices have likely incentivised culling from herds. Indeed, UK cow slaughter levels have been relatively stable during the first half of 2024, down 0.3% at 290,000 head. However, data from the British Cattle Movement Service (BCMS) suggests there has been particular uplift in slaughtering out of the beef herd.

Pressure on margins within the beef sector has intensified in recent years. Producers have contended with increased production costs caused by volatility on global markets and testing weather conditions. Wider policy changes across devolved administrations is also a factor of uncertainty for farm businesses. Assessing farm business data and industry confidence surveys highlights the fragility of the current mood in both the short and medium term among beef producers.

Looking ahead, while cost inflation has generally eased in 2024, the uncertainty over profitability remains. Cow slaughter has remained robust during the first half of the year, while growth in heifer kill has been the main driver behind increased prime cattle throughputs. While in the short-term, increased heifer slaughter adds more supply to the market, it points to downward trends in breeding female herds generally.

Prime cattle slaughter and availability

During the first half of 2024, UK prime cattle slaughter was 2% (21,000 head) higher than the same period last year. Cattle population data from BCMS around the turn of the year had shown an uplift in cattle on the ground, suggesting that kill could be boosted in the first half of 2024. There was also an extra half working day during this period versus 2023 when looking at calendar months.

However, comparing to our forecasts published in February, prime cattle kill has been slightly ahead of expectations. This has potentially been influenced by decisions on-farm to market more prime heifers, with this category showing particular uplift in throughputs for the year-to-date.

UK cattle slaughter and beef production in the year-to-date (January to June)

Source: Defra

Cattle population and calf registration trends

The latest cattle population data currently available from BCMS (for 1 April 2024) showed a 1.9% annual increase in the number of cattle aged 12-30 months in GB. This was driven particularly by uplifts in the number of beef cattle aged 18-30 months. This likely stemmed from a combination of increased registrations of dairy-beef calves (particularly in Autumn 2022) and poor weather hindering finishing through winter 2023.

Meanwhile, a notable reduction in the number of animals aged under 12 months in GB was recorded at 1 April 2024 (-3%). Indeed, the number of cattle in this age group has posted annual reductions for the past two years, driven by fewer dairy bull calves. However, reductions have accelerated over the last 6 months, linked to a steeper fall in suckler calf registrations in 2023.

In 2023, the total number of calves registered in GB fell by 2.5% (66,100 head), the steepest reduction seen since 2018. While suckler calves and dairy bulls drove this primarily, the number of dairy-beef calves registered continued to rise. However, this was not enough to outweigh the reductions, and suggests that contraction in the suckler herd is having a larger bearing on overall beef youngstock numbers. Read our analysis on dairy-beef production here.

Prime cattle slaughter forecasts

Based on the above data, our updated 2024 prime cattle slaughter forecast is relatively unchanged at 2.06 million head, up 1% from 2023. However, factoring in slaughter levels so far this year and updated population figures suggests lower cattle availability in the fourth quarter versus a year ago.

The outlook for 2025 is for prime cattle slaughter to reduce further, by approximately 3% versus 2024 to 1.99 million head.

Actual and forecast UK prime cattle slaughter

Source: Defra, AHDB forecasts in hashed bars

A key caveat to the forecasts is heifer slaughter, which is partly influenced by producer intentions around stocking levels. If reductions in the breeding herd accelerate ahead of expectations, this puts more would-be replacement heifers into the prime beef supply pool and supports production in the short to medium term. If stabilisation - and especially growth - in the national breeding herd occurs, this takes prime heifers out of the beef supply chain.

Cow slaughter forecasts

The forecast for total 2024 cow slaughter is revised to 604,000 head, down 1% from 2023. This is based on stronger-than anticipated kill in the first half of the year. Lower forecast beef supply on the continent could keep cattle prices supported generally and draw more cows forward. However, relatively positive milk price projections off the back of lower supply may encourage some cow retention in the short-term.

Looking out to 2025, cow kill is expected to lower by a further 1% as the breeding herd contracts.

Beef production forecasts

With prime cattle carcase weights expected to be stable overall, UK beef production is forecast to total 903,000 tonnes in 2024, up 0.3% compared to 2023. In 2025, changes in slaughter are expected to lead to a further 2.6% reduction in beef production.

In 2023, total beef volumes were 1% lower year-on-year. There was reduced demand for beef in retail and takeaway due to cost of living pressures but some boosts as people returned to dining out (Source: AHDB/Kantar, 52 w/e 24 December 2023). For more details on 2023 trends and cut specifics, see our retail and foodservice dashboards.

For the year ahead we expect inflation will continue to fall, and wages will continue to rise. The overall economic outlook will improve, although there are headwinds including world conflicts that have the potential to derail this.

This means that some shoppers will feel genuinely better off, while others will continue to struggle and look to make savings when they can. After three years of overcoming challenges and reconsidering how to spend their money, we expect any changes in shopping behaviour to be gradual.

Following analysis of the latest retail and foodservice data, our overall 2024 beef outlook remains largely unchanged, with beef volumes still forecast to be up 1% compared to 2023. However, this is 5% below 2019 levels as cost-of-living pressures remain. We still forecast that 2024 will bring increased demand for retail with volumes forecasted to rise slightly compared to 2023. However, out-of-home volumes are forecast to decline year-on-year.

Estimated and forecast beef consumption volumes

Source: AHDB

In retail, cheaper primary cuts such as mince are expected to do well, and any rises in scratch cooking could further benefit mince due to its low-price point. However, shoppers will continue to restrict how often and how much they buy in store by reducing waste and stretching meat over more meals. It’s hoped a return to more normal summer weather following last year’s washout could benefit beef burger volumes at BBQs. Targeting promotions and campaigns towards key events such as this could help boost sales further. However, this remains a watchpoint as greater demand for these cheaper cuts like mince and burgers could create carcase balance issues for farmers through devaluing the carcase. It is also forecasted that beef will see another strong performance at Christmas.

Within the out-of-home market, dining out volumes are forecast to fall year-on-year due to sluggish performance in the first half of 2024 resulting from the cost-of-living crisis. However, volumes are forecast to pick up in the second half of 2024, with a warmer summer expected to boost dining out demand if the sun comes out. With cost pressures on consumers and businesses, smaller numbers of office Christmas parties could limit demand in December. Whilst forecast lower than 2023, takeaways are the only channel expected to see volumes increase versus 2019. This will likely come from increased volumes of burgers due to their relative affordability, which could offset declines in more expensive cuts like steaks, continuing trends we saw in foodservice last year.

Opportunities for the beef industry to improve demand include:

• For cheaper cuts, encouraging tasty and versatile beef dishes which play on value for money. Inspire using batch cooking and filling meals, coupled with retail promotional support.
• For more premium products, capturing meal occasions lost from more expensive proteins and the out-of-home market by inspiring treat dinners such as fake aways or restaurant quality dine-in recipes.
• Addressing health concerns by communicating the health benefits of beef, such as B12, iron and protein.
• Encouraging consumers with the right messaging in-store, online, on pack and in foodservice.
• In the longer term, look to maintain and build consumer trust, demonstrating where farming values (animal welfare, environmental stewardship and expertise) are shared with consumers. See our consumer reputation landscape hub for more information.

AHDB has a range of marketing activities planned for the year, including the new Let’s Eat Balanced campaign. Please visit our marketing pages for more information. For more insight around consumer demand, visit our retail and consumer pages.

UK imports of beef rose from the year before during the first four months of 2024 (latest data available at time of writing), supported by competitive pricing and robust domestic demand. HMRC data shows that 122,000 tonnes of beef (carcase weight equivalent, including fresh, frozen and processed) was imported during this period, up 11% year-on-year, and ahead of forecasts. Irish beef drove the vast majority of this increase. Imports from New Zealand and Australia have also risen strongly but from a much smaller base, accounting for around 2% of total imports combined during the period.

Meanwhile, UK beef exports increased by 7% to 46,700 tonnes (carcase weight equivalent, including fresh, frozen and processed). This was ahead of forecasts and driven mainly by shipments to non-EU destinations, such as Hong Kong, Canada and the Philippines. Shipments to the EU grew to a lesser extent but still made up most of the trade (85%) during the period.

International trade for the remainder of the year will be determined by domestic demand, supply, and price competitiveness. Slight growth in domestic consumption and tightening domestic supply could see imports supported. However, beef prices in the UK and Ireland have moved closer together since the end of 2023 following supply shifts, which may temper growth in shipments over the coming months if the trend continues. Industry forecasts and data on cattle numbers suggests Irish cattle supply will reduce in the second half of 2024 and into 2025, which may restrict import growth somewhat going forward. However, the close nature of the Irish and UK markets would suggest any tightening in Irish supply may affect other smaller markets in the first instance.

Overall for 2024, beef imports are forecast to be up by approximately 4% against 2023.

Industry forecasts for lower supply in the EU and northern hemisphere could be supportive generally of exports. For the EU specifically, analysis points to slightly pressured consumer demand generally, but lower supply is expected to increase import requirements. Slight growth in domestic production may also facilitate greater shipments.

Overall, 2024 exports are forecast to rise by 2% against 2023.

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