Beef prices rocket in Scotland as destocking takes its toll

The impact of a declining beef herd in Scotland has been felt by the trade, with fewer store and finished cattle coming forward.

Scottish government figures show that the total beef breeding herd declined by 12% during the past decade, standing at just 382,600 head last year.

Total cattle numbers in Scotland have been falling back as a result, with a further 1% reduction in the last year to 1.67m head.

See also: Changes to Scots’ suckler beef scheme ‘damaging’ say auctioneers

Iain Macdonald, market intelligence manager at Quality Meat Scotland (QMS) told Farmers Weekly that they had observed quite a large reduction in beef cow numbers, especially in the past couple of years.

“There has been two years of declines of roughly 2-3% in beef cow numbers, then all the sudden, you’ve got a big hole in prime cattle supply that is starting to come through now.”

The rate of decline has been higher than modelling by QMS had anticipated, given the stronger cattle prices and lower input costs in 2024.

Mr Macdonald suggested that there were lots of factors at play driving the decline and farmers in the Scottish uplands have traditionally found it difficult to make a profit.

“Even though we have seen improvements on the output price side and reduction in inputs, it’s probably still been difficult to make a margin. Hopefully that might change, given the way prices have gone more recently.”

The major risk to the Scottish beef sector from fewer stock is the impact on the wider supply chain, such as hauliers, livestock markets, and abattoirs.

Mr Macdonald added: “There is quite a bit of spare capacity at the moment in the beef processing sector – with further decline, there is potential that you could lose a small- to medium-sized abattoir.”

NFU Scotland has said the livestock sector remains well below critical mass, and it could lead to unintended consequences for the sector.

Finished prices

Fewer prime cattle have created more competition for what is available and pushed prices up to new record highs.

Average Scottish steer deadweight price came in at 576p/kg in January, up almost 80p/kg on the same week last year.

Scottish auction markets have also started the year off exceptionally well, with liveweight steers averaging 329.5p/kg in the past week, while heifers averaged 335p/kg.

This uplift in trade has carried through to the store ring as well, where 12-18 month steers have been selling for £1,640/head.

Mr Macdonald added that the sharp rise in store prices should hopefully give some confidence to store producers that there is a bit more money in the job for them.

Suckler beef scheme

A tool which could help stem the flow of beef producers leaving the sector is the Scottish Suckler Beef Support Scheme.

The scheme provides £40m in funding each year to support beef producers in Scotland, and has been guaranteed to continue until at least 2028.

Lisa Hislop, livestock policy manager at NFU Scotland, said: “The importance of this scheme to Scotland’s iconic red meat sector cannot be underestimated as it ensures producers around the country are encouraged to keep producing beef calves to underpin the production of high-quality scotch beef.”

However, legislative changes could mean fewer farmers will be able to qualify for future payments, according to the Institute of Auctioneers and Appraisers in Scotland, with a 410-day calving interval condition due to be introduced to the eligibility criteria this year.