Steers hitting the R4L specification in the North of England look set to undermine the Scotch premium which has been enjoyed by producers north of the Border to the tune of anything up to 20p per kg for decades.

The Scotch beef label – first registered with the EU in the mid-1990s before attaining PGI status and that premium price – has, in recent years, been slipping away, much to the delight of the meat processors. As demand for beef has increased, it has become virtually non-existent over the past month.

Latest average deadweight values for the week ending October 2, show just 2p per kg difference between the average steer price in Scotland, at 416.0p per kg, while those in the North of England are averaging 414.2p. A closer look at those hitting spec' tells us there is almost a 2.5p per kg difference in favour of those in the North of England receiving 422.1p against R4L steers in Scotland at 419.7p.

There is little, if any premium, available now for Scottish heifers, young bulls and cows cashed deadweight ,compared to their counterparts in the North of England as well. The average price for R4L heifers in Scotland for the same week were 421.3p, against 420.1p, while young bulls and cows cashed in at 410.3p and 330.5p, compared to those in the North of England at 409.1p and 328.8p, respectively.

"If English prices are ahead of those under the Scotch label, it will be for the first time," said National Beef Association chief executive, Neil Shand, who added that there has been a shortage of cattle coming forward for slaughter with the result that those with any decent numbers of cattle to be sold can virtually 'name their price,' and can obtain and additional 10p per kg over base.

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Add in that supermarket chain, Asda, has made the decision to buy only British beef from October 1 on and the fear is there could be a real shortage of red meat on the shelves for Christmas. Many abattoirs are also now looking to stock-pile for December, which is helping to bolster trade.

It was a point highlighted by Scott Donaldson, chief executive of Harrison and Hetherington, at Carlisle, who pointed out that the live auction mart in the north of England is now driving trade.

"Prices are off the clock when you look at the number of cattle – including some from Scotland – rattling through Darlington Auction Market, which are frequently selling for well over £3 per live kg, with many of the prices equivalent to 435p-440p per deadweight kg. There is now a £2000 club down there. Even out of spec' cattle are making big money and it's the same at other markets such as Selby, Thirsk and Northallerton, which are selling big numbers of cattle ever week to wholesalers and local butchers.

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"The A1 corridor is a huge area for feeding cattle and there is also a strong demand for finished cattle here in one of the highest populated areas of the country."

Stuart Ashworth, chief economist at Quality Meat Scotland, added that while deadweight prices for cattle slaughtered in the North of England and Scotland can be extremely close, and often in the months of February and March, other factors are at play to include the region being home to Dovecote Park and Woodhead Bros abattoirs which always pay premium prices for native-bred cattle.

"There are extra bells and whistles creating macro circumstances. Abattoirs are in the peculiar position of being constrained by the amount of cattle they can slaughter as a result of labour issues which is creating a ripple through the market place. What is unclear is whether the higher prices are being created due to the reduced volume of cattle in the supply chain or the capacity of individual abattoirs," said Mr Ashworth.

His colleague, Iain Macdonald, pointed out that Scottish meat processors and transporters are already experiencing staff shortages due to the stricter regulations for EU workers following Brexit.

“Roughly half of the red meat processing sector’s workforce in Scotland is estimated to have originated from outside the UK, and it is more challenging for UK businesses to recruit from abroad since leaving the EU single market.

“Labour shortages in processing businesses are of particular concern given that the seasonal supply of livestock usually rises in the final quarter of the year to meet increased red meat demand over the winter. There are also concerns around shortages of drivers to transport livestock and meat around the country.”

Data from Scottish auction marts for the past five years points to a lift of roughly 10% in prime lamb marketings between September and the three-week pre-Christmas peak in Scotland, and by around 20% in England and Wales.

Meanwhile, at Scottish abattoirs prime cattle slaughter averaged around 10% higher at its three-week pre-Christmas peak than in September over the past five years. The peak for cattle tends to begin earlier than for lambs, closer to mid-November due to the longer maturation period.