Prime cattle prices in Scotland surged to unprecedented levels in the first half of September 2024, driven by a seasonal reduction in beef production and strong demand from both domestic and international markets, according to the latest market commentary from Quality Meat Scotland (QMS).

The price of R4L grade steers reached £5.17 per kilogram deadweight (dwt) during the second week of September at Scottish abattoirs, marking a 5% increase compared to the same week in 2023 and 23% above the five-year average. After a dip in prices between March and June, a rebound of more than 7% was observed over the following three months, with three-quarters of the rise occurring from late July onwards.

This period of rising prices coincided with seasonally low slaughter rates for prime cattle, with the number of animals reported for deadweight pricing across Great Britain remaining below the weekly average from the first half of the year throughout July and August. Although numbers have started to increase again, the supply was still lower than earlier in the year in the first half of September.

Iain Macdonald, Market Intelligence Manager at Quality Meat Scotland (QMS), said: “The significant rise in prime cattle prices reflects intense competition among processors, as they compete for cattle while the weekly slaughter rate begins to trend upwards. This is coupled with a general uplift in UK beef production during the first eight months of the year compared to 2023.

“During the summer, beef consumption tends to be slower due to people leaving the UK to go on holiday, but the post-holiday period has bolstered retail demand for beef. Kantar data has shown a 6% increase in household spending on beef in Great Britain year-to-date in 2024. Retail price inflation has also eased, which has brought a halt to the downward trend in sales volumes, with even a 3% year-on-year increase in the 12 weeks to early August.”

In addition, demand at the lower end of the market appears to have firmed up, with cow prices rising in recent weeks. This has occurred despite an expected seasonal rise in the availability of cows for slaughter, which typically pressures prices downward.

Iain said: “On the export front, demand for UK beef has remained robust throughout 2024, with export volumes up nearly 11% year-on-year between January and July, according to HMRC data. While much of this growth can be attributed to declining EU beef production, significant sales of lower-value products to non-EU markets like Hong Kong have also contributed to the rise.”

Looking ahead, the coming weeks typically see a seasonal uplift in prime cattle throughput. However, Iain cautioned: “The timing of the autumn peak in production varies each year. In 2023, for example, we saw a strong average kill in October, followed by a significant dip in November, which is unusual as production usually peaks in the lead-up to the festive period.”

The most recent cattle population data from the British Cattle Movement Service (BCMS) for July 2024 indicates a continuing increase in prime cattle numbers on Scottish farms, with a 2% rise in animals aged 12 to 30 months compared to July 2023. This is primarily due to a larger spring calf crop in 2022 and an increase in the 18-24 month age group, reflecting a decrease in store cattle movement to England.

Iain commented: “Despite the rise in prime cattle numbers, adjusting the slaughter data for cross-border trade suggests that fewer animals from this year’s herd have been processed than anticipated. When combined with an elevated number of cows leaving Scottish farms for slaughter, it suggests that producers may be replacing their less productive cows, positioning the sector for future productivity.”

Looking to the rest of the UK, the July cattle population data south of the border shows a small decline in prime cattle aged 12 to 30 months, signalling potential tightening in supply once the current stock of older animals has been processed.

Iain concluded: “As for store cattle availability, reduced calf crops across Great Britain in autumn 2023 and spring 2024 mean that availability will remain tight at upcoming autumn sales. Demand for Scottish-born stores is expected to remain strong among finishers across the UK. Yearlings, in particular, are likely to be scarce, with the July population data pointing to a near 7% year-on-year reduction in animals aged 6-12 months in Scotland.”