Cold Weathers Pushes Beef Demand Up

UK - One of the consequences of the cold weather in January was an increased demand for beef with consumers apparently eating their way through more stewing, frying, grilling and mince beef to see them through the snow and ice.

26 March 2010

2 minute read

Europe

Volume demand for beef was up eight per cent compared to the previous January and was at its highest level for January for the last four years. This increase in demand was naturally welcome for an industry that has been put under pressure by weak demand during the economic recession.

Moving into February there were some concerns raised about poor demand in both Northern Ireland (NI) and in Great Britain (GB) and some of the local factories reduced their quotes. The figures certainly show that volume demand in February was lower than that of January. However, on a positive note, demand was slightly stronger than in February 2009. This is encouraging, although it appears to have been driven by lower retail prices and not by a sustained shift in consumer tastes following the high level of demand experienced in January. If 2010 follows the typical trend, demand will continue to fall into the summer.

In the four weeks ending 21 February 2010, retail beef prices in GB were two per cent (12p/kg) lower than in the same period last year. This may be partly a consequence of reduced farmgate prices in GB, where the average R3 heifer price was 6.5p/kg lower in January/February 2010 compared to the same period in 2009.

The reduced retail prices appear to have driven increases in demand with GB consumers purchasing over 25,000 tonnes of beef during the four weeks ending 21 February. This figure is 321 tonnes higher than the corresponding period last year (one per cent up). With reference to specific cuts, it was increased demand for mince and frying / grilling cuts that drove the increased demand. Mince demand was up by nearly six per cent in February 2010 compared to last year with demand for frying / grilling cuts up by 3.7 per cent. Compared with the same period last year, roasting joints were down by six per cent and stewing beef was down by 3.6 per cent.

With volume up by one per cent and retail price down by two per cent, the net impact was a reduction in beef expenditure in February of one per cent.