Hotel and Restaurant Closures add to Instability in Farm-Gate Prices

Huge changes in demand from the retail and foodservice sectors as a result of the Coronavirus crisis are causing significant and unpredictable price instability in the red meat sector, according to Hybu Cig Cymru – Meat Promotion Wales (HCC).

Whilst there has been a surge in retail demand for some meat products, with many butchers reporting unprecedented demand and consumers increasing purchases on convenient and cheaper cuts like mince, the near complete closure of the multi-billion-pound foodservice sector has caused major instability in market prices.

The dramatic reduction of trade to hotels, restaurants, pubs, educational establishments and workplace cafeterias has produced a destabilising effect on the market prices for lamb and beef. Hospitality and catering are major recipients of more expensive cuts, such as steaks, which helps processors achieve a better balance for the whole carcase. Combined with disruption to the export trade, the factors affecting livestock market prices are complex and volatile. 

Exceptionally high prices were recorded for both prime lambs and cull ewes at auction markets in Wales during March, with prime lambs peaking at 249.0p/kg for the week ending 21 March. As the lockdown restrictions on eating out came into effect in the UK and across much of Europe, the prime lamb prices fell by 50.0p/kg on the week, whilst cull ewe prices in Wales were down £38.60/head to stand at £62.50/head for the week ending 28 March. 

With the current imbalance in the supply chain, HCC is working with processors and retailers to ensure that shelves are re-stocked with the full range of cuts that consumers may want, in parallel with outreach to consumers to encourage different eating habits. A new and re-focused social media campaign from HCC promotes ways of cooking larger cuts in ways that are convenient and affordable for family meals and utilise simple store cupboard ingredients.

Gwyn Howells, chief executive of HCC, commented, “The media reporting of increased consumer purchasing, via panic buying, coupled with busy butchers’ stores demonstrates an overly optimistic picture for the meat industry. Significant disruption to the out-of-home market is a cause for concern which HCC is tackling head-on. Getting the message across to consumers that cuts other than mince can be prepared and enjoyed at home is crucial in maximising value for all parties in the red meat sector.”

Official data for retail demand for March will become available in early April. HCC will maintain reporting on prices whilst markets remain open and operational.   

Stay abreast of current market prices on the HCC website. https://meatpromotion.wales/en/markets/gb-regional-weekly-auction-market-prices

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About The Author

John Swire - Deputy editor of Agronomist and Arable Farmer as well as responsibility for the Agronomist and Arable Farmer and Farm Business websites. After 17 years milking cows on the family farm John started writing about agriculture in 1998 and has since written for a variety of publications and has developed a wide circle of contacts within the industry. When not working John is a season ticket holder at Stoke City and also of late has become a fitness freak, listing cycling, swimming and walking as his exercises of choice.