UK Beef Market Hits Historic Highs as Prices Surge to £7/kg

UK Beef Trade Witnesses Historic Activity as Prices Climb to £7/kg

The UK beef market is experiencing historically high prices, with the R4L steer price recently breaking the £7/kg deadweight barrier. This unprecedented situation is driven by a combination of factors:

Reduced Domestic Cattle Supply

The UK cattle herd has been shrinking, particularly the beef female breeding herd. This decline, coupled with a forecast 6% drop in prime cattle slaughter for 2025, means fewer animals are available for processing. Several factors contribute to this, including underlying business profitability concerns, declining direct payments to farmers, and a shift towards dairy-beef production. Farm closures in regions like Scotland have further exacerbated the supply shortage.

Strong Demand

Despite rising prices, demand for British beef remains robust both domestically and in export markets. Consumers increasingly prefer fresh, primary beef cuts. The global appetite for beef has also contributed to strong export figures for the UK.

Increased Costs

Farmers face higher input costs for feed, energy, and transportation, which are being passed down the supply chain. Rising minimum wage and other economic factors are also influencing prices.

Global Market Influences

International demand, particularly from the EU, and ongoing global supply chain disruptions contribute to the UK’s beef price levels. While the UK is a significant beef exporter, it also relies on imports to meet demand, making it susceptible to global price fluctuations.

Weather Conditions

Unpredictable weather patterns can impact agricultural production, leading to lower crop yields for feed and affecting cattle health, further straining supply.

Looking Ahead

While high farmgate cattle prices are expected to be supported throughout 2025 due to tight supply, the price sensitivity of consumers will be a crucial factor in overall carcass values. The UK is also expected to increase beef imports to compensate for lower domestic production.