In the last 12 to 18 months we have seen dramatic volatility in the beef sector. Serious cattle shortages brought record prices while periods of over supply brought prices down and there were also changes in weather patterns not seen in the last 20 to 30 years.
The summer of 2012 saw some of the wettest weather ever known and cattle grazing during that summer barely grew in the wet cold conditions. Forage stocks were low in volume and poor in quality meaning that a lot of cattle under performed during the winter, and spring didn’t start in many regions until May, by which time cattle were behind their normal weight for age targets. As a result finished cattle were in very short supply from June to August with average R 4 L prices getting to the dizzy heights of £4.00 per kg.
The summer of 2013 was one of the best cattle grazing summers for many years with cattle achieving growth rates of 2 kg per day at grass making up the lost ground they had suffered in the previous 6 to 12 months. The surge of cattle coming to finished condition between November and April 2014 along with a 1-2 % drop in red meat consumption brought average prices back to £3.50 / £3.60 pence per kg with this trend prevailing all over Europe.
The number of cattle will start to dry up and all the predictions are that beef consumption will return to normal as we go into the summer which should stabilise prices and even a lift is possible as numbers fall back mid summer. Looking forward, prices will not see the heights of last year but should improve. We are probably right to assume that the extraordinary weather patterns we have seen in the last 2 years will not reoccur in the next 2 years and a more stable picture will emerge. The retail sector has had profitability problems in the last 12 months and that is bound to keep a lid on the price but a shortage of cattle, as we have seen, has a dramatic affect.