A new analysis of the outlook for the UK beef sector has pointed to crucial global factors which will give farmers cause for optimism, despite uncertainties at home.
Over the past 12 months, farmgate prices for beef cattle have hit record levels. In the early months of 2023, steers consistently fetched close to the £5 per kilo mark in the deadweight market.
The average price in England and Wales sat at £4.85 per kilo at the end of March – 17% higher than the levels seen in 2022, and 33% higher than the 5-year average for the time of year.
The report, part of Hybu Cig Cymru - Meat Promotion Wales (HCC) market insight series, points to significant challenges for both farmers and consumers at home.
GB retail figures suggest that domestic consumers are feeling the cost of living pinch, with the proportion of beef sold as cheaper mince products increasing to 54%, which has an impact on the profitability of the supply chain.
And farm input costs, although lower than they were in the immediate aftermath of Russia’s invasion of Ukraine last year, are still historically high, putting pressure on farm business margins.
However, an analysis of global data suggests that worldwide demand, which has helped to underpin farmgate prices, will continue to be buoyant.
In 2022, the volume of beef exports from Wales jumped by 20% on the previous year, with the trade worth around £75m to Welsh farmers and processors.
HCC’s intelligence insight executive, Glesni Phillips said: “By looking at cattle population data, we can see that beef production in GB as a whole is set to increase slightly in the short term.
"Given the challenges we face in terms of the impact of the cost of living crisis on British consumers, this could have led to a shift in the balance of supply and demand and a fall in farmgate prices.”
However, she added that a tight global supply of beef was likely to continue to have a significant impact.
“Production may be set to increase somewhat in GB and some other countries such as Brazil and China in 2023," Ms Phillips said.
"But this is offset by likely reductions in output in Europe, including Ireland, and a significant fall in the amount of beef produced in the USA.
“These factors should give some confidence to beef producers in Wales over the next 18 months," she said.
