Finished beef prices in Scotland have fallen dramatically from a peak of 525p per deadweight kg at the start of June, but the good news is they are not expected to fall much further according to those in the know.

With clean cattle prices falling another 5p per deadweight kg this week to 460-465p, and young bulls down to 455p, the average price of a 380kg carcase is worth a frightening £250 less than what it was at the end of May.

Latest figures for the final week of July show that the average All Steer price in Scotland was 470.3p, down 7.2p on the previous seven days, with All Heifers levelling at 475.3p (-2.2p); young bulls at 459.9p (-4.0p) and cows at 362.90 (-6.9p).

Disappointing as they are, such values are nevertheless higher than those commanded south of the Border, where the average All Steer and Heifer prices were 460.3p and 456.8p/dwkg respectively. Young bulls and cows were less at 453.5p and 333.4p.

Notably, while supplies remain finely balanced in all areas, total GB slaughterings are down in all sections, which, according to Neil Shand, chief executive of the National Beef Association, will help to fuel prices going into the back-end.

“Demand for beef is still good and cattle numbers are expected to tighten going into September and the final quarter of the year, so I don’t expect prices to fall below 450p per kg,” he told The Scottish Farmer.

“The closure of Scotbeef, when there were no cattle killed by the plant for a month, did have a negative impact on the trade and created a surplus.

“The month of June was arguably too hot for many to eat as much as usual too, which could have affected demand, alongside more people taking holidays abroad now that the covid restrictions have eased.

“Once the schools go back in September and cattle numbers tighten, prices will improve,” said Mr Shand.

He added that the difficulty for many lies with input prices which remain well above inflation while bank interest rates are increasing and several finishers bought store cattle at their highest levels. Meanwhile finished beef prices continue to fall.

While beef values have been falling fast since early June in the UK, prices across Europe have weakened since the start of 2023 – despite fewer cattle being slaughtered.

Reliance on export markets means that Irish cattle prices have also fallen, widening the discount to equivalent prices in GB, and particularly for cows. The difference between the average R3 GB steer price and equivalent Irish value in January was about 4p/kg; in the week ending July 17, this had widened to just over 60p.

The close nature of the UK and Irish beef markets means that prices for cattle trend quite closely. However, British cattle usually trade at higher prices to Irish equivalents, with some protection coming from the strong presence of homegrown beef in retail. Recent strengthening in sterling against the Euro will have also offered some support to the GB price.

According to a report from AHDB, supply dynamics may also be weighing on prices when UK imports of Irish beef rose in May compared to a year ago, following several months of lower volumes.

Since then, domestic supplies have also risen, with Defra production figures for June showing more cattle slaughtered during the month compared to a year ago.

Irish cattle slaughterings also picked up in June, having been below 2022 levels since February.

The report also points out that domestic cattle supplies will increase seasonally towards Christmas, but overall cattle slaughter will remain below a year ago. AHDB claims the differential between the price of homegrown beef and that of imported product will be key, with Irish cattle supplies expected to tick up towards the end of the year, and demand forecast to remain subdued in key export markets.