Beef prices are fast approaching those last seen in 2011, and with the continued downward spiral, there are real fears for all those in the sector.

Add to that claims from three meat buyers that the trade will hit £3 per deadweight kg by Christmas, increasing amounts of beef coming in from Poland and it comes as no surprise that many finishers and suckler cow producers are fast considering throwing in the towel.

Blockades at abattoirs in the south of Ireland over the continued decline in finished beef values have done little to aid the situation too, with an even bigger backlog of beef to get through the system now that some sort of normality has resumed.

And yet, beef prices in the supermarkets remain relatively unchanged, so either the processors or the retailers are making some pretty fat profits at the farmer's expense.

But, who will win long-term? With the national beef herd declining and likely to fall further when producers are being hammered from all sides, the processors will eventually be hit, unless they are prepared to up their game.

The government is unlikely to come to their rescue either as they're happier importing poorer quality product from abroad, as long as it's cheaper. But, with beef prices falling globally, how long will it be until there is a world-wide shortage of beef.

As it is, prime cattle prices in Scotland are 12% lower than this last year according to Stuart Ashworth, director of economics services at Quality Meat Scotland, who added that prices are also down across The Pond and on the continent.

“American beef producers are currently receiving 7% lower prices than a year ago while across the EU, average producer prices are 10% lower for prime steers and 5% lower for prime heifers,” said Mr Ashworth.

He added that when quoted in US dollars, major traders Argentina and Brazil are also seeing a slide in producer price. However, the effect of exchange rate movements is apparent in that the Brazilian price, when quoted in local currency, is around 5% higher than last year.

The dramatic weakening of the Argentinean currency over the past month means that in local currency, Argentinean producers currently benefit from prices nearly 50% higher than a year ago.

Looking down under he said, Australia is also benefitting from weaker exchange rates which have helped to push their beef producer prices 5-7% higher without affecting their competitiveness on international markets.

Unusually, producer prices in many parts of the world have slipped despite lower volumes of beef being produced.

The European Union reports total beef production in the first half of 2019 was 1% lower than it was in 2018. The USDA also report lower throughputs at their abattoirs than this time last year which combined with a reduction of around 4kg in carcase weights, means lower domestic production in the US.

Although not as significant, the UK reported lower weekly kills of prime cattle through past quarter but because of increases in carcase weights of around 5-7kg, the volume of beef produced has increased.

“Provisional UK trade data for July shows beef imports to be significantly lower than they were a year ago,” said Mr Ashworth.

“Over the first seven months of the year, customs data shows imports to have fallen 9% while exports have increased by 14% resulting, despite higher carcase weights, in a lower volume of beef on the home market,” he added.

In France where the current producer price is a more modest 1% lower than a year ago, their production has fallen 3% over the first half of the year. Lower production and lower imports points towards lower consumption in France.

Similarly, beef imports into the EU over the first seven months of 2019 have been 4% lower than in the same period last year. Adjusting for trade and a fall in production, the volume of beef available for consumption within the EU has dipped below last year’s levels despite producer prices weakening.

“European beef prices have therefore come under pressure at a time when the volume of beef produced has been sliding, suggesting weaker demand for beef,” concluded Mr Ashworth.

* Farmers are encouraged to attend an NFUS Red Meat Crisis Panel Session meeting in a bid to save their industry. The meeting, being hosted in the Glen Garioch Room, Thainstone, near Inverurie, takes place on Monday, September 30 at 7pm, with refreshments available throughout the evening.

Panel speakers include Andrew McCornick (NFUS president); Kate Rowell (QMS chair); Robert Neill (Upper Nisbet Farm, Jedburgh); Scott Donaldson (Auctioneers Association); Neil McCorkindale (Scottish Beef Association (SBA)); representatives from the Scottish Association of Meat Wholesalers (SAMW) and British Retail Consortium (BRC).

Please register your attendance by booking with HQ on telephone (0131) 472 4000.