Review of 2022

Carcass balance issues caused by strong demand for ground beef and the battle between poultry and pork could be on the cards for beef in 2023 as consumers come under pressure.

Analysts say the average price of beef is less than £9 per kg compared to lamb, where the average price of lamb is about £12 per kg, so beef is more likely to meet the domestic challenge. I was told it could be a little better than lamb.

Pork averaged £5.50/kg and poultry £4.50/kg in late 2022.

Consumer price inflation has likely peaked at 11% and is expected to ease to 5% in the final quarter of the year, according to the British Chamber of Commerce.

In 2022, the combination of an aging farm workforce, declining subsidies, retirement payments, fertilizer, fuel and feed costs made some feeding systems unsustainable.

This forced herd’s to reduce and disperse before winter. A large number of culled cattle entered live markets and processing.

Many expect a tight supply, with some saying prices will rise through to 2024. However, it appears no one will be immune from recession as 2023 looms ahead. Economic pressures are projected to take a bigger bite out of profits and create ongoing uncertainties in the markets ahead.

Going into 2023

  • Beef prices held through the autumn despite a 2% increase in UK production this year, largely from more cull cows being slaughtered. Furthermore, Ireland’s cattle slaughter increased by 8% for the first 11 months of 2022. This shows some resilience in the beef price.
  • Calf registrations from 2020 to quarter one 2022 suggest lower domestic beef supplies late in quarter four of 2023 and early 2024.
  • Falls in beef price should be limited by tight EU and global supplies. EU forecasts are for a 1.8% contraction in beef production, making imports less competitive, particularly if a weak pound persists.
  • Tight European production and ongoing contraction in the US beef herd, amplified by drought, is lowering northern hemisphere production. The US is the world’s largest beef producer and second largest importer (largely lean manufacturing beef for burgers), but is also a major exporter of premium cuts such as steak.
  • Although some countries, notably Brazil, are forecast to lift production, Rabobank forecasts a tighter beef supply picture until 2026.
  • Total global protein supply will be up next year, say Rabobank analysts, which means more competition from cheaper products.
  • High mince demand and limited steak sales could pressure higher value cuts, as carcass balancing issues arise and consumers continue “trading down”.
  • If the UK-Australia free-trade deal is ratified, as expected, the Australians may target deliveries at the premium restaurant trade.
  • he Ukraine/Russia conflict has elevated cereal prices (total costs are up to £4/day on a 100-day finishing period). If the war eases, there could be relief to fuel and cereal prices.
  • The high cost of milk powder and concentrates is hitting the economics of rearing dairy beef calves. A drop in milk prices may, at least, offer some easing of powder costs.

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