LMC Report: Improved GB Beef Demand In First Quarter

UK - The recession of 2009 weighed heavily on the Northern Ireland beef industry, with weak demand an ongoing feature of the market throughout last year.
calendar icon 23 April 2010
clock icon 2 minute read

Other factors such as a weak exchange rate and tight supplies meant that farmgate beef prices held up reasonably well throughout this difficult economic environment. However, weak demand certainly dampened the market’s potential and created a more challenging environment for operators right along the supply chain. NI beef producers became accustomed to hearing about consumers “trading down” with reports of cash-strapped consumers switching to cheaper meat cuts and cheaper meat types. For the European red meat industry, the recession was characterised by reduced demand for prime beef with more consumers opting for mince. With tentative signs that a recovery is starting to take root in the general economy, NI beef producers will be looking for some signs of an improvement in beef demand. The latest figures from Kantar Worldpanel provide some cause for cautious optimism (Kantar has recently acquired TNS).

On initial inspection of Figure 2 below, some producers may be slightly dismayed by the trajectory of the blue line which represents volume demand in 2010. This shows a sharp reduction in beef demand in GB between January and March. It should be noted, however, that this decline is typical of the seasonal decline in beef demand which has occurred throughout the first half of each of the last four years, and has probably been a standard feature of the market for years. In 2010, it is likely that demand will be in decline right through until the summer before it starts its seasonal recovery.

This seasonality in the market, makes it difficult to compare one month to the next. As a result it is generally more appropriate to make comparisons using year-on-year figures such as March ‘09 with March ‘10 or the first quarter this year with the first quarter last year.

These comparisons will make for more positive reading among NI beef producers. During the four weeks to 22 March 2010, beef demand was three per cent higher than for the same period in 2009, despite the fact that average beef prices were unchanged over the same period.





Further Reading

- You can view the full report by clicking here.

TheCattleSite News Desk

© 2000 - 2024 - Global Ag Media. All Rights Reserved | No part of this site may be reproduced without permission.