British beef production forecast to fall by up to 7.5%

Beef production in England, Scotland and Wales is forecast to fall by 7.5% in the worst case scenario in a recent report published by the Agriculture and Horticulture Development Board (AHDB), the levy organisation that provide a similar service to what Bord Bia delivers in Ireland.

The report presented three other scenarios as well as the worst case for production in 2030, all of which showed some level of decline.

The best case scenario forecasts a 5.2% drop in production, with a best case plus scenario showing the beef output decline falling by 2.2%. The other scenario is based on the trend of the past ten years continuing until 2030, and that would mean that output would fall by 6.1%.

Worst-case scenario

The most negative AHDB forecast is based on the rate of herd decline increasing with less-favourable market conditions. They predict that beef output will be down by 7.5% to 681,000 tonnes in 2030 compared with 2023.

As has been the case in Ireland over recent years, the suckler herd is forecast to decline significantly, down 15.6% to 940,000 head by 2030 with the dairy herd also forecast to decline if only by a relatively low 4.1%, to 1.457m head.

This decline is forecast to lead into a sharp decline in cattle going to the factories for slaughter. The prime cattle kill is predicted to fall by 121,000 head compared with 2023 to 1.551m in 2030, a 7.2% decline with a similar rate of decline in cow slaughter down 34,000 head to 458,000 by 2020.

Baseline scenario

The baseline scenario is modelled on the trends of the past ten years continuing at the same pace up to 2030. The numbers produced in this scenario are only marginally better than the worst case forecast.

Based on the past 10 years performance, the suckler cow herd is predicted to fall by another 121,000 head or 10.9% by 2030 compared with 2023. The dairy herd is also forecast to decline, down by 1.2% or 18,000 head to 1.502m.

If the present trends continue, beef production in 2030 will be 45,000 tonnes lower in 2030 at 691,000 tonnes which, is 6.1% lower than it was in 2023. The factory kill of prime cattle is forecast to drop by 105,00 head or 6.3%, to 1.567m by 2030. The cow kill is forecast to drop by 22,000 or 4.4% to 471,000 head.

Best-case scenario

In the best-case scenario, AHDB are assuming that “market conditions and profitability are more positive.” They forecast that the dairy cow herd will increase slightly, rising by 12,000 head or just under 1% to 1.532m by 2030 compared with 2023.

The impact of this will be more than offset by a falling suckler herd which, even in the best-case scenario, is predicted to fall by 65,000 head or 5.9% to 1.049m in 2030.

AHDB have calculated that this will mean 91,000 less prime cattle for factory slaughter in 2030, a 5.5% decline on 2023 and 11,000 less cows which is a decline of 2.1%. The combined effect of this will be a drop of 38,000 tonnes of beef production to 698,000 tonnes in 2030 compared with 2023 output.

Best-case + scenario

AHDB have also considered what might happen if producer confidence was higher still and that efficiency in breeding increased further. In this scenario, they are forecasting a modest increase in the dairy herd from 2025 through to 2030, rising by 34,000 head or 2.2% to 1.554m.

In this scenario the suckler cow herd would continue to decline but only by 2.4% or 27,000 head to 1.087m in 2030 compared with 2023.

This would translate into a small decline in factory kills, with a 2% or 33,000 head drop to 1.638m head of prime cattle going into the factories in 2030 compared with 2023, and the cow kill is forecast to drop by just 3,000 head or less than 1% to 490,000 head in 2030. Overall beef production is forecast to drop by 2.2% to 720,000 tonnes in 2030 compared with 2023 in this scenario.

There is always a risk with any type of forecasting and in general the longer the forecast is into the future, the greater the risk is.

AHDB have qualified these forecasts with a series of caveats that could have a major impact on the direction of travel for beef production over the next five years in Britain.

Foremost among these is consumer demand, which they predict will remain stable over the period.

Unforeseen disease or weather events have the potential to disrupt production, as has government policy to either incentivise or indeed discourage output.

Other policy changes such as reduced age of slaughter or market access, such as might occur if a trade deal was made with the USA, has the potential to impact output and hasn’t been considered in the AHDB forecast.

Any reduction in production with continued stable demand would mean an increased demand for beef imports. Being the closest and most established supplier puts Irish exporters in pole position to fill this deficit, and create further competition for the cattle coming off Irish farms.

However, will Irish production rise to meet this opportunity or will the UK simply attract a greater share of Irish beef exports, which is almost 50% at present? Irish suckler cow numbers have been in decline over a prolonged period, and expansion of the dairy herd has ceased and is more likely to decline than increase over the next five years through a combination of higher milk yields and production restrictions.

The market opportunity in Britain due to decline in domestic production will not go unnoticed by other major exporters. Australia has dramatically increased sheep meat exports to the UK this year to fill the void left by reduced domestic production. This was made possible by the tariff free access granted in the UK–Australia trade deal, and this equally applies to beef.

Overall declining production in the UK will mean strong factory demand for cattle so long as consumer demand remains stable. In a wider global context, the US beef production cycle is also at a low point, which means that cattle prices have been high there also and are likely to remain so.

Only Brazil has the potential to increase beef exports substantially, and over recent years this growth has been absorbed by increased demand from China. For Irish beef, the best export market will remain the one closest to us, and farmers will be hoping that this translates into a closing of the price differential between Irish and British factory price.