24 April 2012

3 minute read

Europe

However, with higher prices, expenditure on all of these meats was stronger year-on-year according to Kantar. Demand and supply theory suggests that reduced supply will lead to higher prices and consequently reduced demand until market equilibrium is restored. This certainly appears to be reflected in the beef market over the course of the last year.

Higher farmgate prices (see Table 1 March Snapshot adjacent) are now being passed onto the consumer with a 12 per cent increase in retail beef prices in the four weeks ending 18 March compared to the same period last year.

During that period in 2011, the retail beef price averaged £6.00/kg in GB according to Kantar’s data. In the four week period ending 18 March 2012, corresponding prices averaged 80p/kg more. It is worth noting by way of comparison, that average prime cattle prices in Northern Ireland increased by 50p/kg over the same period (see table 1 adjacent).

GB remains the largest market for Northern Ireland (NI) beef and it is a concern that in the four weeks ending 18 March 2012, retail beef volume sales are down seven per cent year-on-year. However, first and foremost this decline has to be seen in the context of reduced supplies of beef from the home market. Throughput at the factories in NI, GB and ROI has been much reduced since the start of the year and in this respect is no surprise that retail volume sales are under pressure and perhaps it lessens the concern at this decline.

In the four weeks ending 18 March beef stewing sales fell sharply, with volumes down by 14 per cent year-on-year. Beef frying and grilling sales were down 10 per cent with sales of roasting joints down by nine per cent compared to the corresponding period last year. With the tough economic environment, it is perhaps no surprise that of all cuts, mince sales are holding up the best. However, mince volumes were still down three per cent year-on-year in the four weeks ending 18 March 2012.

Higher retail prices leading to reduced volume sales may be a concern, but it is very reassuring that consumer expenditure on beef is holding up. Beef expenditure was up by four per cent in the four weeks ending 18 March. However, the rate of increase was slightly slower than that for the last year.

Looking at the data for the entire year ending 18 March, consumer expenditure on beef was up five per cent. Despite a five per cent increase in price, volume demand did not change at all yearon-year. In the 12 weeks at the end of that period, a 12 per cent increase in price led to a four per cent decline in volumes and consequently expenditure increased by seven per cent. The rate of increase in expenditure appears to have slowed in the four weeks ending 18 March 2012. Nonetheless, it remains encouraging that retail expenditure in the sector continues to grow.

Lamb sales holding up well compared to 2011

Lamb volumes have been under serious pressure over last year in particular with sales down 16 per cent. The latest data from Kantar shows that demand may be stabilising however.

In the four weeks ending 18 March 2012, the average retail price of lamb was up by five per cent year-on-year compared to the same period in 2011. Despite this however, volume sales of lamb were only down by one per cent year-onyear meaning that expenditure on lamb in GB during that period was up by three per cent.

Lamb leg roasting (+22 per cent) and stewing (+6 per cent) sales were particularly strong during that period. However, sales of lamb roasting (-19 per cent), mince (- 15 per cent) and chops (-13 per cent) were under pressure.

However, the fact that overall sales held up reasonably well along with expenditure is positive, particularly since GB is a key lamb market for the NI industry along with France.

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