September 22, 2011

UK cattle prices up due to tight global supplies

The 20% increase in UK cattle prices as compared to last year was due to constricted global supplies, according to Welsh red meat promotion agency Hybu Cig Cymru.

The average GB steer deadweight price was just over US$5 per kg during the first week of September, compared with US$4.17 in 2010. Heifer prices increased by 21% to average US$4.96 per kg, and young bulls increased by 24% to average US$4.78 per kg.

"The increase in prices follows a number of difficult years for beef farmers in Wales and the rest of the UK who have struggled to make a profit, particularly in the face of rising fuel, feed and fertiliser prices which have consistently outstripped the rate of inflation," said HCC's industry information officer John Richards. These price rises signify an improvement in the business outlook of Welsh beef farmers.

As an international industry, the Welsh red meat sector must take into account what happens on the world stage. Beef production is predicted to rise only in Australia and Brazil over the next 12 months, and expected to fall elsewhere.

China is an increasingly important player in the food market, and the country is expected to purchase increasing volumes of beef from South America, while Russia is struggling to increase its domestic beef production and therefore continues to import large volumes.

These contributing factors have helped boost prices for Welsh beef farmers, which has hopefully instilled some confidence in beef producers on the long term viability of the industry.