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Store cattle prices feeling the effects of strong finished market
Wednesday, 30 June 2021
It’s no secret that finished cattle prices have been strong for a while, supported throughout the pandemic by strong demand in supermarkets (where British beef typically does well) and tighter cattle supplies compared to last year.
Initially store sellers may have felt left behind, as they had already let cattle go by the time finished prices initially rallied. However, the strength in finished cattle prices has been sustained, beating the five-year average for around a year now. So, sellers of store cattle have been feeling the benefits too, with higher prices across the board.
Compared to their own five-year average, it appears that native breeds may have fared slightly better than continental types since the autumn. This might be related to the prevalence of breed schemes in supermarkets, where demand has been concentrated since the end of March 2020.
In addition, those selling store cattle are perhaps less directly affected by rising prices for bought-in feed, due to their greater reliance on forage. Of course, their customers (the finishers) will still have to incorporate the higher cost of feed into their cattle purchasing decisions.
Medium-term demand for cattle will also play a part in those decisions, especially for processors looking to secure numbers ahead of time. Although the reopening of foodservice has been rather fitful, increasing demand from this sector may eventually lead to lower demand from supermarkets, and so lower demand for British cattle.
More immediately, reports suggest that numbers of cattle available for slaughter are tightening again. The number coming out of yards is apparently falling, while those coming off grass aren’t quite ready yet. This may support finished, and so store cattle prices for the time being. Indeed, the recent uptick in prices for 2yr old stores, those closest to slaughter age, may be an indication of the short-term direction for finished prices.
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