The major processors and retailers in the UK are focusing on specification and farmers there are being hit as store cattle prices ease.
Store cattle prices in the UK have eased back in the early months of 2016 due to the factory specifications which were introduced last year, according to the AHDB (the body for British beef and lamb).
The AHDB reports that the major processors and retailers in the UK are focusing on specification, whether it be movement, weight, conformation or age.
Last November, Dunbia introduced a new range of specifications to meet the demands of its retail customers.
The specifications limited the number of cattle movements to four, with cattle that exceed this requirement penalised by 15p/kg (18.6c/kg).
It also reduced the maximum weight carcass weight limit from 415kg to 400kg.
Also in November 2015, ABP – one of the largest beef processors in the UK introduced weight and age limits, with cattle over 36 months of age paid at the same rate as cull cows.
The Larry Goodman-owned company also started to cut over weight cattle, with the prices paid for carcasses over 450kg cut by 12p/kg (14.8c/kg).
UK store cattle prices drop
According to the AHDB, UK yearlings and forward store prices in March have dropped on last year’s levels, mainly due to the factory specification changes.
In March the average value of a yearling Hereford steer in England and Wales was just under £670 (€828) per head, down £25 (€31) on the corresponding month last year.
The average Hereford heifer price dropped by £15/head (€18.60/head), AHDB figures show.
Looking at the 18-month-old age category, Hereford steers are back £85 (€105) per head year on year while heifers are back almost £70 (€86.60).
In addition, continental cattle prices have also fell. In March last year, 18-month-old continental steers made £1,000 (€1,237) per head, this year in the same month they are back to £935 (€1,156) per head.
Continental heifers of the same age were back around £60 (€74) year on year at £820 (€1,014) per head, it shows.
The AHDB reports that store cattle producers in the UK need to achieve a good price for their cattle in order to encourage them to retain their suckler cows which are expensive to keep.
But, it suggests that price penalties for cattle falling outside their favoured specification look likely to be an issue for the sector this year.
And as a result, it will have a knock-on impact on confidence, which in turn may well influence the store cattle trade.