Rising input costs and farm closures drive beef price increase

In 2025, UK supermarket beef prices have experienced a significant rise, with a record 27.5% increase over the past year. This surge is primarily attributed to supply constraints and rising input costs affecting the beef industry.

Supply and Demand Dynamics

The increase in beef prices is largely driven by a decline in cattle numbers across the UK. Quality Meat Scotland and other industry bodies have expressed concern over this "worrying beef decline". The closure of cattle farms, partly due to escalating costs, has exacerbated the situation. Since 2020, approximately 8.5% of cattle farms have ceased operations, leading to a reduction in cattle numbers, which in turn has applied upward pressure on prices.

Economic Pressures

Farmers are facing increased costs for energy, feed, and labor, which have been rising since the pandemic and further intensified by the conflict in Ukraine. These factors have significantly impacted farm operations, contributing to the closure of farms and the reduction in cattle supply. Katharina Erfort, a principal at global supply chain consultancy Inverto, noted that the current price hike is the largest since at least 1988.

Market Implications

The elevated beef prices have begun to affect consumer behaviour, with many opting for cheaper alternatives such as pork and poultry. This shift has led to a 10% decrease in primary beef volumes over a 12-week period ending October 5, according to data from AHDB. Meanwhile, the demand for pork has increased, with a 3.3% rise in consumer spending driven by a 2.6% increase in volumes purchased.

Looking Ahead

As consumers continue to seek more affordable protein options, the pork industry may benefit from the current squeeze on beef purchases. However, the first incidents of avian flu are putting additional pressure on poultry prices, potentially complicating the market dynamics further.

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