A contracting beef and dairy herd coupled with reduced supplies in the system should ensure stable ex-farm prime beef prices throughout 2021 according to a new report.

With a 2% increase in prime cattle slaughterings in 2020 and a higher number of heifers in the chain killed, the number of prime cattle coming forward in the UK in 2021 is forecast to be down 5%.

The beef outlook report from AHDB points out that while GB cattle prices have entered 2021 in a generally strong position, there are several factors that may have a bearing on future prices.

On the one hand, data pointing to tighter cattle supplies in both GB and Ireland may be positive for domestic cattle prices in the short-term. In addition, data from last year has shown that restricted foodservice activity drives higher demand at retail, which benefitted farmgate prices in 2020.

On the other hand, continued economic uncertainty and the prospective end of furlough schemes may lead to many consumers tightening their belts, potentially opting for cheaper cuts.

Last year, similar behaviour caused initial problems for the carcase balance and thus, prices. How, and how quickly, the country emerges from a lockdown situation, and how the eating out market re-opens going forward will be crucial.

The good news is beef has proven to be an important staple for consumers. Latest figures from Kantar world panel reveal beef boasted the greatest volume increase in retail of all proteins, at +11% for the 52 weeks ending December 27.

The largest actual growth in retail volumes was around mince, burgers and steak. These cuts proved popular during a large part of 2020, with mince-based meals offering good versatility to consumers. The sunniest spring on record also helped kick off barbecue season early, boosting sales of beef burgers. This also helped reverse the trend of declining steak consumption in-home.

Overall, beef volumes for the full year 2021 are expected to fall 3% year-on-year and volumes are expected to stand-on those of 2019 being a more typical year.