How do cattle carcase prices affect supermarket prices, and what does that means for farmers?

Key points

• Farmgate and retail beef prices are linked, but falls in farmgate prices can take time to appear on supermarket shelves
• The model predicts changes in farmgate prices take 8 to 12 months to affect rump steak retail prices and over a year for mince. A 10% rise in farmgate carcase price increases rump steak retail prices by 3% to 6.5% and mince prices by around 3%
• With carcase prices down on last year and well back from the peak in April 2025, our analysis suggests that retail beef prices may start to fall. Although other factors such as higher energy, labour and transport costs could keep prices above previous levels

Overview

Deadweight cattle prices reached record highs in 2025, peaking at over 700p/kg. Since then, prices have steadily fallen, levelling out at around 600p/kg.

Retail prices, however, haven’t followed this trend. This is because it takes time for price changes to move through the supply chain, from processors and packers to distributors and retailers.

Retail prices are also affected by many other costs including energy, labour and transport, not just the price of cattle.

The gap between cattle prices and retail prices can raise concerns over market fairness in the supply chain. However, some of these concerns may be explained by time it takes for prices changes to pass through the supply chain, as well as the multiple shocks to energy prices, which have increased costs for every stage of the supply chain.

How does the farmgate beef price impact retail prices?

To understand how closely farmgate cattle prices are linked to retail prices and how long it takes for price changes to reach consumers, we used an econometric model.

The model compares the UK all prime overall carcase price with average retail prices for rump and beef mince. It also takes into account other factors in the supply chain that affect prices, including global beef prices, energy costs and labour. Due to limited data availability, the analysis covers January 2014 to January 2025 and does not include the major price changes seen in 2025 or reflect the current market situation.

Because rump steak is one of the less processed cuts, the link between carcase price and retail price is easier to see. The model estimates that if carcase prices rise by 10%, retail rump steak prices will go up by between 3% and 6.5%. However, this adjustment happens gradually over the following 8 to 12 months.

For mince, the link is weaker. Mince is a product shoppers can easily compare between supermarkets and is often used to attract them into stores. Because of this, retailers absorb some of the carcase price increases rather than pass them on. The model suggests that a 10% rise in farmgate carcase prices is linked to a 3% increase in retail mince prices. These price changes take longer to work through the supply chain than they do for rump steak, often taking over a year to be reflected in shop prices.

Looking at both rump and mince in the period studied, there is no statistical evidence that retailers consistently raise prices quickly when farmgate prices go up but are slow to reduce them when prices fall. 

Figure 1.  Logarithm of deadweight cattle price, average mince price and average rump price from January 2018 to January 2025, with 3 indicators illustrating the time delay.

Source: ONS, AHDB

This graph shows the logarithm* price of all prime overall carcass price, average rump steak and average beef mince from January 2014 to January 2025. The dotted lines show that when the carcase price was lowest in Oct 2019, the fall wasn’t reflected fully in rump until Oct/Nov 2020 and in mince until Feb 2021.

Recent peaks and troughs in cattle prices have made the lag between farmgate and retail prices far more noticeable.

When carcase prices fall sharply but supermarket prices stay the same, it can appear that retailers are failing to pass reductions on to shoppers. However, our analysis suggests this is mainly because it takes time for price changes to work their way through the supply chain, rather than because retailers are quick to raise prices up and slow to cut them.

Understanding this delay helps producers set realistic expectations of when farmgate price changes will be reflected in shop prices and where any genuine concerns about market fairness should be focused.

How have price changes in retail impacted beef demand?

High beef prices in shops are leading some consumers to buy less beef. As a result, the amount of beef sold through retailers has fallen compared with the same period last year, based on the latest 12-week figures. Read our analysis to explore how consumers are responding to rising beef prices.

Demand has slowed even though promotions have returned. After scaling back promotions to offset rising wholesale costs, retailers and processors are increasing beef offers, with promotional volumes now running ahead of last year. The recovery has been most noticeable in primary beef cuts, with more sold on promotion than during the same period last year. The level of investment in promotions appears to be similar to last year.

The renewed focus on promotions may reflect changing market conditions. As deadweight cattle prices have started to fall, retailers may have greater scope to offer discounts and deals, helping to encourage consumers to buy more beef after a long period of high prices reducing sales.

Despite these challenges, the share of retail beef sales accounted for by British beef has remained stable over the past year.

Outlook/predictions

With carcase prices peaking near 700p/kg in April 2025 before settling at around 600p/kg, much of the upward price transmission to retail has likely already taken place, meaning beef prices in shops could begin to ease.

The model suggests any change will be gradual, with rump steak typically taking 8 to 12 months to reflect changes in farmgate prices, and mince over a year.

Just as price increases were slow to feed through, any reduction is likely to be equally delayed. Rather than falling sharply, beef is more likely to settle at a new, higher level.

Energy, labour and transport costs remain significant price drivers, so even as cattle prices fall, these broader pressures could keep shelf prices high. Instead of cutting prices, retailers may simply hold them steady while other costs continue to rise, offering shoppers gradual relief without any fall in the shelf price.

In the short term, consumers are more likely to see savings through promotional activity. As cattle prices ease, retailers will have more flexibility to expand discounts, which could help encourage beef sales after a long period of high prices reducing demand.

*Logarithmic scale is used to allow percentage changes to be compared consistently over time and makes long-term trends easier to interpret.

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