Slaughter prices for both prime and cull cattle are seeing year-on-year increases, with the 15% increase for cull stock, outstripping a 12% increase for prime stock, according to the latest analysis by Quality Meat Scotland (QMS).
During May, UK abattoirs handled over 2% more cull cows than last year. However indications from price-reporting abattoirs and auction throughputs is that the volume of cull stock they are receiving has dipped slightly in recent weeks.
“Looking at the cull stock category, the indications are that there has been an increase in beef cow slaughtering this year, while dairy numbers have reduced slightly,” said Stuart Ashworth, Head of Economics Services with QMS.
“While this is slightly concerning in terms of the outlook for the size of the suckler herd in the future, there are indications from census and BCMS data that there are more beef-sired heifers currently on farms that could be used for breeding than there were last year.”
Nevertheless, over the first four months of 2017, GB and Scottish calf registrations have dipped by around 0.5% on last year.
It is not just the UK that has seen firm cull stock prices with cull cattle prices also looking strong across Europe. In many major beef-producing countries prices are 5-10% higher than this time last year.
“In some countries, for example Germany, cull cow prices have increased by more than prime stock prices. However, in Ireland cull cattle prices have cooled in recent weeks and are currently less than 1% up on last year having been running around 5% higher for most of the year.,” said Mr Ashworth.
In Ireland these higher prices earlier in the year were achieved despite Irish cull cattle slaughter numbers being up 12.5% over the first half of year.
Strong prices for both prime and cull stock across Europe point to demand exceeding supply and - given the particularly strong cull stock prices - an increased demand across Europe for manufacturing beef.
A swing towards lighter carcase weights in the UK and Ireland, although not for cull cows, has reduced beef production which, all-things-being-equal, would support producer prices in these countries.
There are signs of firm demand for manufacturing beef which would support cull stock values in the short term. Kantar Worldpanel retail market research suggests a growth in sales of added-value beef products in the UK, and UK Customs data shows a growth in the imports of frozen boneless beef, although fresh chilled imports have fallen.
However, Mr Ashworth noted that historically UK cull stock slaughter volumes are typically at their lowest in May and June and peak in October and November.
Another factor supporting the wider European beef market has been a growth in exports outside of the EU of 17% in the first four months of the year. This has been accompanied by a useful growth in markets associated with lower value cuts, and a reduction of imports of 6% over the same time frame. The UK, too, has seen some modest growth in exports outside of the EU and reduced imports.