Comparing GB cattle prices to export performance

By Rebecca Wright

Retail sales are only one outlet for domestic beef, along with food service and exports. Exports have increased so far this year, although they continue to account for less than a fifth of domestic production. Although export volumes are higher, export prices are lower. This suggests exports are in part clearing the market, rather than there being a strong overseas demand drawing on UK beef. The correlation between export and farmgate prices is somewhat muddied as there are multiple prices at both ends of the market.  Across a longer time period, say several months, there is some correlation between farmgate prices and export prices.  

Around 70% of UK exports so far this year have been of boneless cuts. Typically fresh boneless cuts attract the highest price, and so far this year, there has been a decline in shipments in this category. In contrast shipments of frozen boneless cuts have increased, more than compensating in volume, but at a much lower price.

UK imports have declined from all major suppliers. Volumes have declined, deterred by the lower prices they can achieve, with imports from further afield the first to drop off. Over half of the total decline in imports can be attributed to less frozen boneless beef coming into the UK.

Of course, global trends influence UK import and export prices. Industry reports suggest that global beef wholesale prices have weakened. Global farmgate prices are largely under pressure currently, although recent sharp movements in several currencies does also impact the picture. The global export unit value has been declining for around a year. More positively, there is the expectation that Chinese demand for protein will help underpin the global market in the coming months and even years.

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