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AHDB Pig Market Weekly


16 March 2012

AHDB UK Market Survey - 16 March 2012AHDB UK Market Survey - 16 March 2012

The Scottish Government reported that livestock numbers in Scotland were lower year on year.

AHDB

English sheep producers increase numbers

In the December survey published by Defra the English sheep flock recorded a four per cent increase on the year. The number of breeding females increased by 160,000 head, reflecting optimism within the sheep industry, largely attributable to increased farmgate prices. In addition, there was a five per cent increase in the number of other sheep and lambs. The majority of animals in this category will be lambs under one year of age. This reflects the very good seasonal conditions from lambing onwards last year and the slight flock growth in 2010.


The pig herd in England declined almost one per cent, as a result of the decline in the number of fattening pigs. There was however a continued stabilisation in the breeding herd with numbers totalling 415,000 head for the third year in a row. This was driven by an 11 per cent increase in the number of gilts intended for first time breeding as the number of animals actually in pig was two per cent lower on the year.

The total number of cattle and calves in England fell almost three per cent. Male cattle numbers declined four per cent which further supports expectations that beef supplies will be tight in 2012, as there will be fewer male cattle available for finishing. Reflecting the continued concerns over profitability, in both the beef and dairy sectors, and the high cull cow values encouraging culling, breeding cow numbers were also lower on the year. There were 15,000 fewer suckler cows in the herd and 42,000 fewer dairy cows.

Welsh sheep numbers increase

The Welsh Government reported that the number of sheep on Welsh holdings was six and a half per cent higher year on year. This was the largest percentage increase recorded in the UK. The female breeding flock increased five per cent, as a result of a significant rise in the number of females tupped for the first time.

A 10 per cent increase in the number of ewe lambs under one year old, retained for future breeding, indicated that this trend is likely to continue. The number of other lambs in the flock under one year old increased 14 per cent to 930,000 head. These increased numbers can be attributed to growth in the Welsh flock in 2010 and the better than average seasonal conditions experienced for much of 2011.

Cattle numbers in Wales declined by almost three per cent. Both the dairy and beef herds contracted. There were increased numbers of younger dairy females in the system indicating some of these losses may be replaced. However, with the reduced number of younger beef bred female animals there is little expectation that the beef herd will recover in the short term. The number of male cattle aged 1-2 years old was lower, indicating a reduction in the availability of cattle for finishing in 2012. However, calf numbers were marginally higher than year earlier levels.

The small number of pigs in Wales fell by four per cent to 25,600 head. The survey reported 3,200 breeding pigs which is four per cent fewer than in December 2010.

Scottish livestock numbers fall

The Scottish Government reported that livestock numbers in Scotland were lower year on year. The decline in cattle numbers was broadly in line with the UK trend; however the fall in pig numbers in Scotland was considerably higher than in other regions. Scotland was the only region of the UK to record a decline in sheep numbers as high culling rates in 2011 eroded breeding numbers.

The total number of cattle on Scottish holdings fell by almost two per cent or 32,000 head. Both beef and dairy cow numbers were lower as culling rates increased with producers taking advantage of the increased cull cow values. The number of heifers in calf for the first time fell six per cent indicating that the fall in cow numbers is indicative of a longer term decline. The number of cattle aged 1- 2 years was 6,000 head lower at 386,000 head; further indicating tight beef supplies in 2012. However the number of cattle between six months and one year old increased one per cent, indicating that there may be an increase in supply in the future.

The sheep flock in Scotland fell three per cent to 4.47 million head. There were 28,000 fewer breeding ewes in the flock, a decline of one per cent on the year. The number of tupped shearlings was back four per cent and the number of ewe lambs intended for future breeding declined two per cent. In contrast, there was an eight per cent increase in the number of ewe lambs put to the ram, and the number of shearling ewes that weren’t tupped increased by almost a quarter. The number of other sheep and lambs, mainly lambs destined for slaughter, were six per cent lower.

Pig numbers in Scotland declined 10 per cent to 368,000 head. This was driven by a 14 per cent decline in the female breeding herd which is the biggest indicator yet that some producers may have left the industry in the face increased input costs and negative margins. The number of fattening pigs was 10 per cent lower at 329,000 head.

Cow numbers increase in Northern Ireland

The results of the DARD December agricultural survey show that Northern Ireland was the only region in the UK to record an increase in the number of cows in the cattle herd. This was despite there being a marginal fall in total cattle and calf numbers. The number of dairy cows was one per cent higher at 281,000 head while beef cow numbers were three per cent higher at 269,000 head. There were also increased numbers of heifers in calf for the first time. The number of other cattle over two years old was stable on the year, while the number of animals aged between one and two years of age was seven per cent lower. However, the number of calves below six months of age was three per cent higher, indicating increased registrations in response to the larger breeding herd and better beef prices.

The total number of pigs in Northern Ireland increased two per cent to 437,000 head. Although this rise masks a three per cent decline in the female breeding herd. A seven per cent decline in sow numbers, to 23,000 head, was offset to some extent by an increase in the number of gilts in pig. The number of other pigs was two per cent higher at 395,000 head.

Northern Irish sheep numbers increased five per cent on the year to total 1.3 million head. The number of breeding females increased four per cent as ewe numbers were up four per cent and the number of tupped ewe lambs increased seven per cent. The number of other lambs under one year old was 13 per cent higher.

Cattle market trends




Prices

In week ended 10 March, with continued tight supply, the upward trend in cattle prices continued and the prime cattle average price increased on the week to 337.7p per kg. The price of R4L steers edged closer towards the 350p per kg threshold, up marginally to 346.3p per kg. R4L heifers were over a penny dearer at 344.5p per kg while the average price of R3 young bulls increased three pence on the week to 332.8p per kg. The price of -04L cull cows has strengthened almost 20 pence since the turn of the year to reach 275.5p per kg.

In week ended 14 March the liveweight prime cattle trade at GB auction markets eased on the week. Steers averaged 188.8p per kg, down a penny while heifers levelled at 192.2p per kg. The buoyant cow trade continued, driven by firm demand for quality cows from the export and domestic market. The average price for cows at auction increased over a penny on the week to 133.4p per kg.

Estimated slaughterings

AHDB estimated GB prime cattle slaughterings in week ended 10 March were at a similar level to the week earlier at 34,000 head. However, continuing the trend so far in 2012, this was four per cent lower than in the corresponding week last year. Cull cow throughputs were estimated to be 8,300 head in the latest week, 18 per cent lower year on year. In the year to date cow slaughterings are estimated to be down 15 per cent.

Consumption

According to the latest Kantar Worldpanel data in the 12 week period ending 19 February 2012, household purchases of fresh and frozen beef declined seven per cent on the year to 73,700 tonnes. Expenditure increased four per cent to £498 million, as increased retail prices offset the lower volume that was purchased. The decline in the volume of beef purchased as a result of price promotions continued to be evident. Household purchases of most beef cuts were lower than in the corresponding 12 week period last year. The increase in the average price of beef in recent months has encouraged shoppers to switch to cheaper roasting joint alternatives, and as a result, sales of first quality roasting joints were down 21 per cent on the year.

However, in the four-week period, household purchases of cheaper, more versatile cuts increased on the year, sales of stewing beef and mince increased 12 and 3 per cent respectively.

Sheep market trends




Prices

In week ended 10 March there was uplift in the GB deadweight lamb trade, the SQQ increased to 440.7p per kg. There was a firm price increase for R3L graded lambs, up almost three pence on the week to average 445.8p per kg.

Liveweight lamb prices started to pick up in week ended 14 March, possibly the start of the seasonal uplift in the run up to the Easter trading period. The GB Old Season Lamb SQQ increased five pence to 207.1 per kg. With Easter in early April this year, prices are expected increase this month. However the tight global supply situation, prevalent in 2011, appears to have eased. Latest figures from New Zealand indicate an 18 per cent increase in lamb throughputs in January while in Australia, the Australian Bureau of Statistics indicate a 10 per cent increase in throughputs. These increased supplies come as demand is somewhat limited, as a result farmgate lamb prices in both these countries have eased considerably recently.

There was some regional variations in price over the week with the Scottish SQQ marginally higher at 203.8p per kg. In England prices surged ahead and overtook Scotland as the highest value region in GB, the SQQ recorded an increase of almost seven pence to average 208.8p per kg. At 206.8p per kg the SQQ in Wales was up five pence on the week.

Cull ewe values have followed the lamb trade by increasing week on week. At £81 per head the average price was approximately £3 per head higher than last week.

Consumption

According to Kantar Worldpanel, in the latest 12 week period ending 19 February 2012, household purchases of fresh and frozen lamb totalled 15,500 tonnes, 13 per cent lower than in the corresponding period a year ago. The number of households that bought lamb was lower as was the amount purchased on each shopping trip. As a result of an increase in the average retail price, expenditure in the 12 week period declined to a lesser extent, by just over two per cent, to £132 million.

The most significant decline in purchases in the 12 week period was for frying/grilling cuts and shoulder roasting joints, down 18 and 20 per cent respectively on the year. Processors continue to command a high export price, which has meant reduced domestic availability and less pressure on retailers to promote their lamb offering. However, bucking the trend, in the latest four week period leg roasting joints and stewing cuts performed well as a result of increased promotional activity by some retailers.

Pig market trends




Prices

The increase in the DAPP, which began in the previous week, accelerated in week ended 10 March. The DAPP increased to 140.5p per kg, up by almost a penny on the week. This came as increasing pig prices in the EU made UK pig meat more competitive. In line with the seasonal trend, there was a small fall in the average carcase weight of pigs in the DAPP sample to 79.4 kg. The average probe measurement was unchanged on the week at 10.9mm. At the current level the DAPP is more than five pence higher than in the corresponding week last year.

Signs of improvement in finished pig prices have begun to influence the weaner market. The average price for 30kg weaners increased to £45.57 per head for week ending 17 March, a rise of nearly one pound compared with two weeks earlier. This is the first significant price movement since the New Year. The current price is nearly five pounds per head higher than a year earlier and is at its highest level since July 2011.

Tight supplies in the EU have also led to increases in GB cull sow prices in recent weeks. The average price in week ended 10 March was 119.04p per kg, its highest level for nearly three years.

Consumption

According to Kantar Worldpanel in the 12 weeks to 19 February 2012, expenditure on fresh and frozen pork increased by six per cent but the amount purchased fell by three per cent. Reduced promotional activity resulted in a 10 per cent increase in the average price paid by consumers. Reduced purchases were mainly driven by a significant decline in sales of leg roasting joints, down 31 per cent year on year. Fewer retail promotions have acted to drive this decline. More belly and loin roasting joints were purchased, up 18 and three per cent respectively.

Pork sales were poor in the week between Christmas and New Year and this has driven the decline in the latest 12-week figures. Since then, the picture is more positive, with purchases up nearly two per cent in the seven week period since the turn of the year, compared with the corresponding period in 2011. A similar pattern was recorded for some pig meat products, with the amounts purchased in the four weeks ending 19 February significantly above year earlier levels. Almost ten per cent more bacon was purchased, sausage sales increased seven per cent and sliced cooked meats by four per cent.

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