The Covid-19 induced changes to the demand pattern for food sources, have caused considerable challenges for the red meat supply chain, impacting both operational level and market level.

The sheep sector showed how a dramatic change to demand can impact trade immediately and then more moderately as things get worked through from over supply to under supply.

The Scottish Farmer understands that earlier this week Highland Meats and ABP were quoting beef prices to be back 10p per kg deadweight, to around 335p per kg; while Scotbeef and Kepak were back 3p per kg, to 342p and 344p per kg, respectively. With abattoirs dropping the price of deadweight, it is becoming challenging for all involved in the sector, but disappointingly none were willing to comment.

This comes at a time when most of the industry is united in the opinion that at this time, consumers should all be buying British and buying locally, to support the red meat industry and work together.

“Information from the larger price reporting abattoirs show that the number of cattle they have killed has declined over the past two weeks and dropped some 7% in the past week,” said Stuart Ashworth, director of economic services at QMS.

“Operationally, staff shortages – as people self-isolate and companies managing self-distancing on cutting and packing lines – have slowed down the productivity of our processors. In the retail market place, the way in which people shop and what they buy has also changed considerably,” added Stuart.

Market research company, Kantar, suggested that meat sales climbed by more than 25% in the early days of the pandemic, and Scottish abattoirs significantly increased their prime cattle kill in week ending March, 21. However, Kantar also identified a greater interest in mince and other economy cuts.

In short, when compared with the normal situation of combined out-of-home eating and in-the-home eating, the current overall balance of cuts has moved towards mince.

“Even a small switch creates a cashflow issue for the processing sector,” continued Mr Ashworth. “The wholesale price for mince is lower than that of steaks and roasts, even if mince price was to rise it would still be lower than the higher value cuts.”

“For example, for every extra 10kg of a carcase, around 2-3% of the carcase, that a processor has to sell as mince, rather than steak or roasts, could easily mean they are losing £40-£50 of revenue on that carcase. It remains to be seen how the increased demand for mince settles after the initial rush of buying, but indications are that it could prove to be more than the 2-3% used in the above example,” he explained.

“Set against these challenging operational and market conditions, farm gate prime stock prices have generally lacked direction both in the UK and across Europe and remain similar to a year ago. The exceptions being Italy, Spain, Germany and the Netherlands, where prices have fallen compared to a year ago.

“GB Cull cow prices, though, have come under pressure, falling over the past week by some 15%, possibly as a consequence of the loss of economy out-of-home eating. The market, though, is likely to be nervous and volatile until the changed demand pattern becomes established,” he concluded.

Head of cattle sales at Lawrie and Symington, Lanark, Primrose Beaton, commented on the live trade:“Selling in the live ring has been slightly easier, with butchers selling more, as people seem to be buying local more.

“Liveweight trade has been a far better trade than deadweight at the moment, but it is all in the hands of the abattoirs, especially if they make the decision to knock the price further.

“Store cattle prices are holding up well at the moment, but this will only last for as long as the fat price holds up,” said Mrs Beaton.



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