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AHDB Pig Market Weekly


02 May 2012

AHDB UK Market Survey - 27th April 2012AHDB UK Market Survey - 27th April 2012

Ongoing tight supplies of cattle have helped to keep cattle prices well above year earlier levels in the first quarter of the year.

AHDB

Auction Market Update

Ongoing tight supplies of cattle have helped to keep cattle prices well above year earlier levels in the first quarter of the year. The overall prime cattle price, at 186.7p per kg, was up 34 pence year on year while throughputs were down almost eight per cent. This reflects the overall situation with GB slaughterings of prime cattle which were also down eight per cent on the year.

Of these prime cattle, young bull supplies were the tightest with a reduction of 12 per cent year on year. This has been largely as a result of lower dairy bull calf registrations on the back of increased feed costs in recent years. Steer and heifer throughputs were down seven and six per cent respectively. Over the three month period the average price of all categories of prime cattle were a third higher on the year, steers averaged 187.2p per kg while young bulls were 179.2p per kg. Heifers continued to command a premium at auction and averaged 190.7p per kg.

Tight supplies and ongoing demand for manufacturing beef has led to continued strong performance in cull cow values. Overall numbers at auction were eight per cent lower in the first quarter of the year, with prices 24 pence higher at 126.1p per kg for all cows.

In the first quarter of the year 6,400 spring lambs have been marketed at GB auction markets, almost double the number in the corresponding period a year ago. This comes as a result of a combination of the earlier Easter holiday period and the better seasonal conditions throughout late 2011 and early 2012. With processors looking to source adequate supplies prior to Easter prices remained firm and encouraged throughputs. The SQQ averaged 241.1p per kg across the quarter, an increase of seven pence on year earlier levels.

Tight supplies of old season lambs have done much to keep prices buoyant in the first quarter of the year. Overall numbers were down two per cent on the year at 1.49 million head, this is against a three per cent decline in lamb slaughtering. The continued prevalence of heavier lambs is evidenced by the fact that the number of lambs falling in to the SQQ weight band (25.5kg to 45.5kg) were nine per cent lower on the year while those in the ‘heavy’ band (45.6kg to 52Kg) were 13 per cent higher and ‘others’ (over 52kg), recorded an increase of 55 per cent. The dominance of these heavy lambs has resulted in carcase weights in GB increasing half a kilo to 19.74kg during the first quarter of the year.

Cull ewe values have performed strongly across the quarter, reaching record levels as tight supplies kept competition buoyant. Numbers marketed at GB auction markets were down eight per cent, and at £79.40 per head the average price in the period was £10 per head above the corresponding point in 2011.

Cattle Market Trends

GB R4L Deadweight Steer Price

Prices

In week ended 21 April the prime deadweight cattle price eased marginally on the week to average 339.2 p per kg. Reports suggest that the mild winter has contributed to reduced demand which may be curtailing the upwards pressure on prices to some degree. The average price of R4L steers fell a penny to 346.9p per kg, while R4L heifers were at a similar price to the week earlier at 345.4p per kg.

Estimated GB Prime Cattle Slaughterings 2012/11

In week ended 25 April prime cattle prices at GB auction markets also eased on the week. Steers and young bulls were back two pence on the week to 186.9p and 181.9p per kg respectively while heifers were back three pence at 190.4p per kg. Demand for quality cows remained firm, both on the domestic and export market, with major processors of cow beef looking to secure increased supplies. In the latest week the average price of cows at auction leveled on the week at 130.6p per kg.

EU Deadweight Cattle Prices 2011/12

Trade

Exports of fresh and frozen beef in February 2012 totalled 9,700 tonnes. As a result of the decline in production this was 13 per cent lower than in February 2011, however it still represented a significant uplift on trade in February 2010. There was a 21 per cent decline in shipments to the Netherlands, but increased trade to Ireland and France. Despite the fall in volume, the export trade was worth £32.7 million in February, an increase of almost four per cent, as the average unit price increased over 20 per cent on the year.

Imports of fresh and frozen beef into the UK during February totalled 19,000 tonnes, 21 per cent more than in the same month last year. According to HMRC import data shipments from Ireland increased and accounted for almost two thirds of the UK’s import requirements. However, production in Ireland in the first two months of the year was at a similar level to the year earlier. Shipments from UK’s main trading destinations in the EU increased, from the Netherlands up 30 per cent on the year, and from Germany and Spain up 66 and 72 per cent respectively. Imports from Uruguay were 11 per cent lower on the year and were less than half what they were in January 2010. In contrast, imports from some traditional non-EU destinations increased, from Brazil trade more than doubled year on year, while shipments from Australia were marginally higher compared with February 2011.

Beef Trade Jan-Feb

Sheep Market Trends

Deadweight SQQ Clean Sheep Price

Prices

The deadweight price for old season lambs continued to fall in week ended 21 April albeit not at the same rate that was recorded in the liveweight trade. At 462.3p per kg the OSL SQQ was down two pence on the week. In contrast, deadweight prices for spring lamb bucked the trend at auction markets by recording an increase in price. The NSL SQQ was up almost five pence week on week to average 522.5p per kg.

Estimated GB Clean Sheep Slaughterings 2012/11

Trading at GB auction markets continued to be difficult in week ended 25 April with lamb prices continuing to fall. Prices are likely still being pressured by the strong value of sterling and slow demand after the Easter period. However the recent figures pointing to a double dip recession in the UK have weakened the value of sterling to some degree. As a result prices on Wednesday 25 April fell at a slower rate than earlier in the week. Overall the OSL SQQ in week ended 25 April fell 13 pence on the week to 194.7p per kg while the NSL SQQ fell 26 pence to 218.7p per kg.

EU Sheep Reference Prices 2011/12 Heavy Lambs

Trade

UK sheep meat imports in February totalled 5,400 tonnes, 21 per cent lower year on year. This is on the back of the considerably lower imported volume recorded for 2011. In contrast to last year, the main driver in this is the lacklustre demand in the UK market rather than tight supplies. Both New Zealand and Australia have reported considerably higher production in the first two months of the year. Shipments from New Zealand were down 18 per cent while those from Australia fell by more than half. Increased supplies in Ireland were the likely reason behind a two per cent increase in shipments from there. There were no shipments recorded from South American suppliers.

Sheep Meat Trade Jan-Feb

UK exports of sheep meat were up nearly eight per cent on the year at 7,000 tonnes. Volumes to France increased by eight per cent while to Germany they were up 15 per cent. Volumes to non-EU markets increased by a third, accounting for over nine per cent of total shipments. This was a result of Hong Kong taking considerably increased volumes as well as increases in shipments to Norway and Ghana. These increases are further evidence of weakened demand on the home market which has resulted in increased product being available for export, despite production falling.

Pig Market Trends

GB DAPP

Prices

Finished pig prices increased once again in week ended 21 April, the eighth consecutive rise. The euro-spec DAPP increased by 1.30p per kg to average 146.35p per kg. Despite throughputs remaining at or above year earlier levels, the DAPP was still nearly five pence higher than a year earlier. The seasonal decline in carcase weights resumed after the Easter holiday with the average weight falling to 78.43kg, with the average probe measurement unchanged at 10.5 mm.

Estimated GB Clean Pig Slaughterings 2012/11

Weaner prices slipped back slightly in week ending 28 April as feed costs remain high, limiting the number of places with finishers. The average price of a 30kg weaner was £45.35, down about 60 pence on the previous week but almost two pounds more than in the same week a year ago.

EU Pig Reference Prices 2011/12

Trade

In February 2012, UK imports of fresh and frozen pork totalled 22,900 tonnes, 19 per cent down on the year and at their lowest level for over nine years. The fall would have been even sharper but for increases of over 30 per cent in shipments from both Germany and Spain. Denmark remained the largest supplier, despite a fall of nine per cent. Big losers included the Netherlands, Belgium, Ireland and France, all of which shipped more than a third less pork than a year earlier. The reduced volumes came despite unit prices being only two per cent higher than a year earlier at £1.85 per kg.

The recent trend towards boneless cuts continued, with shipments up by three per cent year on year. In contrast, imports of bone-in cuts were 29 per cent lower than a year earlier. Loins were particularly affected, with fresh/chilled loin imports little more than a fifth of their level a year earlier.

Bacon imports recovered slightly from January’s low point during February but were still seven per cent lower than a year earlier. The fall in imports of pork and bacon was partly offset by rising imports of processed pig meat products. Processed imports were 43 per cent higher than a year earlier, driven by major growth in shipments from Ireland, which nearly quadrupled, and from Denmark, which almost trebled.

Pig Meat Trade Jan-Feb

Exports of fresh and frozen pork in February were six per cent above year earlier levels at 12,000 tonnes, which continued the upward trend of recent years. The growth was driven by an increase of over 50 per cent in shipments to Hong Kong, which was again the largest market during the month. There was also strong growth in many smaller markets but Germany, Ireland and the Netherlands all took less British pork. Bacon exports were also higher, up 11 per cent year on year, despite lower shipments to Ireland, the primary market. However, after a sharp rise in January, offal exports were only three per cent higher than in February 2011 with a sharp fall in shipments to Hong Kong offset by growth elsewhere.

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