Analysis Meat
Beef prices react strongly to lower supply
The beef price has risen by as much as 20 cents in the last three weeks. This is mainly due to a lower supply of slaughter cattle. According to insiders in the market, only the demand for scraps is good. Particularly in specialty stores, the demand for luxury parts is actually decreasing.
The price of slaughter cattle has increased significantly this month. The U-quality has increased by 19 cents from €4.78 to €4.97 per kilo. Meanwhile, the price of the P-quality has risen from €2.98 to €3.18.
The higher price is hardly supported by the demand in the meat market. A weak domestic demand is not the problem in itself. Sales in the Netherlands are reported to be good by slaughterhouses. The better weather lately is also helping. Slowly but surely, more barbecuing is taking place again. Traders mention that particularly the export is struggling. Therefore, price increases for luxury parts do not seem to be on the horizon for now. This trend applies even more strongly to meat from beef cattle.
Dutch consumer
The fact that the demand in the Netherlands is generally quite good does not mean that the trend described above does not apply to Dutch consumers as well. Dutch consumers have a clear preference for minced products over, for example, a whole Picanha. Especially in specialty stores such as butchers, consumers often still ignore the more luxurious parts, as reported by slaughterhouses in the luxury segment. This seems to be a consequence of the high inflation in recent years. Insiders in the market have the impression that consumers prefer to invest their money in high-quality ready-to-eat minced products rather than in ribeye or steaks.
Some insiders in the market indicate that sales to the catering industry are somewhat stronger. Last year, it was observed in the market that consumers were buying luxury products as a relatively affordable alternative to dining out. There is speculation in the market that this trend is over now that inflation has eased.
Significantly lower cattle slaughterings
The price pressure is mainly due to a tighter supply of cattle. Insiders in the market have been indicating for almost a month that fewer cattle are being offered, but for the first time, the slaughter data show that the supply can indeed be called tight. In week 19, over 11,000 cattle were slaughtered. The slaughter figure in this period was significantly above the five-year average of over 9,000 cattle per week.
It is now suspected that dairy farmers have selected less productive dairy cattle. For the first time in sixteen months, the slaughter figure has dropped to just below 8,100 cattle. The average slaughter figure over the last five years in that week was just below 8,700 cattle. This explains the price increase in the market.
