With sluggish consumer demand, seasonal over-supply and an unfavourable exchange rate which attracts imports and depresses the export trade, beef cattle prices are unlikely to return to the peaks of two years ago in the in the near future, according to Alan McNaughton, site director at McIntosh Donald’s meat processing plant at Portlethen.
Speaking at the preliminary judging for the company’s annual Best Scotch Steak competition at the Royal Highland Show, Mr McNaughton said the high prices of 2013 were unsustainable in the current economic climate.
“We have to remember that although farmers are not happy with the current level of prices, over the last four years, processors have still paid the highest prices farmers have ever received for finished cattle.” said Mr McNaughton.
“All the indications are that prices will firm up in the autumn as supply and demand comes more into balance but they are not going to hit the level of two years ago.”
Mr McNaughton said Scottish wholesalers could live with a premium of up to 10-12p/kg for Scotch beef over English prices which were in turn influenced by the Irish price which was currently 295.6p/kg compared with McIntosh Donald’s price this week of 338p/kg and an English price of 315p/kg.
He agreed there was an urgent need for stability in the market place to avoid the volatility and wide variation in seasonal prices which farmers were experiencing. But farmers could help themselves by trying to ensure a more stable supply of cattle throughout the year.
The concentration of spring calving inevitably led to an oversupply of cattle on the market two years later.
Sales director, Frank Clark, said the spring peak of marketing had been compounded by the unfavourable currency exchange rate which had made exporting difficult and had led to Irish beef imports becoming more attractive.
“We need stable supplies and farmers should be aware that the market is invariably weak in the spring and firmer from October to Christmas with demand at other times of the year dependent on the weather,” he said.
“Trust has to be built up with farmers that they will receive more stable prices throughout the year if supply and demand is kept in sync.”
Mr Clark said the current retail trading environment meant very few deep cut promotions on beef were taking place at the present time, except promotions based on every day lower pricing, and “Fixed weight – Fixed price” offers.
Mr McNaughton and Mr Clark, with sales manager, Sandy Boyes, and factory manager, Craig Anderson, selected the 12 sirloins from more than 100 cattle for the Best Steak competition and said the standard was as high as usual with a superb offering of top quality beef.
Steaks from the sirloins will be grilled on the Tesco stand on Friday, June 19, at the Highland Show and the winners selected by an expert panel on the basis of eating quality, succulence and flavour. The winner will receive the Quality Meat Scotland Rosebowl and a cash prize of £1,000.
The final line-up includes three Aberdeen-Angus, four Limousin, two Charolais, two Simmental and one British Blonde.
The short-leet of 12 sirloins came from cattle from the following suppliers –
Auchtydore Farms, Easterton of Lenabo, Mintlaw, Peterhead (Aberdeen-Angus cross steer, 364.5kg, -U3)
GJ and A Robertson, Titaboutie, Tarland, Aboyne (Aberdeen-Angus cross heifer, 304.8kg, R4L)
Emslie Partners, Little Barras, Laurencekirk (Aberdeen-Angus cross heifer, 320.5kg, -U4L
J Kindness, Blackhouse Farm, Methlick, Ellon (Limousin cross heifer, 369.1kg, -U4L)
W G Henderson, Nether Toucks, Stonehaven (Charolais cross steer, 382.7kg, R3)
W and J Cameron, Burnside, Edingight, Grange, Keith (Charolais cross heifer, 334.2kg, -U4L)
Bruce and Craig Grubb, Mount Pleasant, Ardallie, Peterhead (Limousin cross steer, 387.4kg, -U4L)
B and C C Taylor, Annamuick, Stonehaven (British Blonde cross heifer, 361.4kg, -U4L)
IJ blackhall and Sons, Milton of Durris, Banchory (Simmental cross steer, 367.8kg, -U3)
Harry G Finnie, Wellside, Balthangie, Cuminestown, Turriff (Limousin cross steer, 381.9kg,
A and E Cumming, Tillydesk, Ellon (Simmental cross steer, 391.4kg, -U3)
J Gordon and Co, Waterside of Forbes, Alford (Limousin cross steer, 370.8kg, -U4L)