Shock beef production jump dents farmgate prices

British farmers produced far more beef in July than expected, surprising analysts and putting pressure on prices.

Prime cattle slaughterings were almost 3% higher on the year at 181,400 head.

This reversed the position for June, when the cattle kill was back 7% on 2014 as supplies tightened earlier than forecast.

Heavier carcass weights meant July production also surged 6% to 83,100t.

These healthier numbers weighed on prices in the last month.

The British all-steers deadweight average fell from 356.9p/kg in mid July to 346.5p/kg this week.

AHDB Beef and Lamb’s report said July’s slaughterings exceeded expectations.

“This marks a turnaround in developments over the previous few months and to some extent explains the shift in the supply/demand balance which arrested the upwards movement in farmgate prices,” the report said.

“It appears that products may have taken encouragement from the firmer prices on offer in June, marketing older cattle ready for slaughter promptly, rather than keeping them at grass over the summer months.”

The collapse in milk prices seems to have hit the cull cow market, with throughputs rising sharply.

About 14% more cows were slaughtered this July compared with 2014.

AHDB said the increase could be due to dairy farmers cutting herd numbers to make better use of summer grass.

Plentiful supplies have combined with subdued holiday demand and still strong sterling to put pressure on prices.

Last week the average cull cow price fell 7p/kg to 209.5p/kg.

UK beef production is still on track to meet the levy board’s forecast of a 2% fall for the whole of 2015.