The absence of a rise in beef prices in the runup to Christmas means the carcase value of a 380kg U3 steer is as much as £60 lower when compared to last year.

However, when feed prices are factored in, the hit to margins is significantly more.

Beef prices have been under sustained pressure during the final quarter of 2018, with current base quotes for U3 animals ranging from 336p/kg to 344p/kg.

Farmers with cattle to sell have struggled to negotiate above base price, and have incurred delays in booking cattle for slaughter.

Up to mid-December, official price reports indicate that U3 steers have averaged 349.8p/kg. For the same month last year, U3 steers were priced from a base quote of 352p/kg to 356p/kg, with price reports indicating U3 steers were paid 364p to 366p/kg. Beef heifers are faring better than steers, but there is still a price gap of 8p to 10p/kg on last year, equating to approximately £30 on a 300kg carcase.

Feed price

Along with lower beef prices, farmers are facing higher feed costs, with finishing rations costing £35/t to £40/t more in the autumn of 2018.

For a steer finished on 750kg of concentrate over a 90-day period, the higher concentrate costs come to an additional £30/head. On a 380kg carcase, a farmer would require a price increase of 8p/kg to cover the higher finishing costs.

Combining the lower beef price with higher feed costs means that margins on finished cattle are down £90 to £100 when compared to 2017.

Looking back at previous years, current beef prices are 6p to 7p/kg behind those paid in 2015, but they remain a long way off the record prices paid in 2013.

Price reports for prime cattle in December 2013 indicate that U3 animals were typically paid 372p to 379p/kg, meaning a 380kg steer was worth £114 per head more than in 2018.