The Scottish Beef Association has dubbed 2014 a “rocky old year” for the sector, but believes better prices are on the way due to an expected shortage in cattle numbers.
The Scottish Beef Association (SBA) forecasts a strong 12 months ahead, following the ups and downs that have typified 2014.
The good weather and excellent grass helped counterbalance the steep fall in prices at the start of this year.
In an end-of-year message, Dumfriesshire farmer and SBA chairman Scott Henderson said: “Beef price is always dictated by the supply-to-demand ratio in the UK, Europe and the world.
“After a pretty poor start in the beef price world, it turned out to be a very good farming year.
Finishers in particular had severe cash-flow difficulties in the first half of the year, but this is slowly turning itself around.
“Weather-wise, after a very slow start, we had one of the best summers and autumns. The grass has been phenomenal and the stock has performed very well. People have been bringing calves in at weaning up to 60kg heavier than at the same time last year.
“Store cattle this autumn have not hit the heights in pence per kilogram, but the price per head has been a record for this time of year,” he said.
“One of the key issues at the start of the year was the 70ppk falls in the beef price.
“Looking back at the issues faced in 2014, it seems the supermarkets’ attempt to cut costs was a major contributory factor in the price reduction. Such fluctuations make it difficult to run a livestock business and plan for the future.”
Increasing numbers of Irish cattle coming on to the market had combined with the strength of the pound to affect export prices.
However, after eight months of losses for farmers, Mr Henderson noted slow gains which had picked up speed towards the end of the year.
“The limited number of finished cattle coming forward has been a factor, and suckler cow numbers are also continuing to fall, although farmers are still not receiving the share of the retail price they require from the supermarkets,” he added.
Mr Henderson admitted it was difficult to predict precisely what was to happen to the beef market in the short term but expected next year to be more settled than the previous 12 months.
In the UK in 2013 and early parts of this year a high proportion of dairy-bred bull calves had been culled at birth, leading to a drop in supply in 2015 when they might otherwise have appeared on the beef market as finished animals.
“The fall in cereal prices in the latter half of 2014, however, was likely to see more dairy-bred bulls being reared and these would come on the market towards the end of 2015 and into 2016.
“The fall in cereal prices is also likely to result in an overall increase in carcase weights by about 5-8kg,” Mr Henderson added.
“Fewer Irish cattle coming forward is expected to reduce numbers, and volatility.
“A strong export market is key to supporting British prices, and the SBA would like to see export trade continuing to grow, especially to Hong Kong, which is the ‘grey channel’ into China.
“A significant proportion of this is fifth-quarter beef. The future is looking more positive even if the UK is not approved to export beef to America, because the Irish will.
“The Irish identified new markets outside the UK for finished stock and their yearling cattle.
“Here in the UK cattle numbers are even tighter, not only from Irish imports but also domestically.
“The cattle being sold are younger, so they will not be there later in the year,” he said.
“UK domestic producers are in a much more optimistic place than we were at the same time last year,” he added.
The domestic beef market relies on consumers demanding British beef, and much relied on awareness of the high welfare and production standards employed.
SBA chairman Scott Henderson said: “Supermarkets that sell fresh British beef for example Marks & Spencer, Waitrose, Morrisons, Lidl, Aldi, and the Co-op must be congratulated.
“However, we would like to see more commitment and support from the other major supermarkets to display and sell more beef with the British banner clearly labelled.
“This will allow buyers to make a much more informed choice.”
“Educating and informing consumers will play an important part in the future of the industry.
“A trend for consumers to move away from supermarkets back to butchers should be encouraged as part of efforts to persuade more people to buy and eat British beef.”