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AHDB Cattle and Sheep Weekly

08 October 2014

EBLEX Cattle and Sheep Weekly - 3 October 2014EBLEX Cattle and Sheep Weekly - 3 October 2014

Cattle Weekly

Prime cattle prices continue to strengthen

In week ended 27 September, the deadweight cattle trade once again demonstrated some modest strength. However, with another week-on-week increase in throughputs, reports suggest that trade was a little more balanced than of late. As such, the GB all prime deadweight average price increased just over a penny on the week to 347.8p/kg. Despite a slowdown in the rate of increase, solid processor demand continues to drive trade and this is the ninth consecutive week in which prices have increased.

Consequently, the GB all prime average in the latest week was 20p/kg higher than at the beginning of August. While prices are still around 45p/kg below year earlier levels, they are now tracking close to the levels of the same period in 2012 and have now returned to levels last recorded in early May of this year.

Despite the more favourable trading conditions persisting, with cattle coming forward in higher numbers it is possible that processors could become more selective as the trade moves towards the Christmas procurement period. Despite the trade still being reportedly good, against a backdrop of more cows coming forward this week, the –O4L cow average dropped 5p on the week to 241.3p/kg. It is possible that the trend of higher numbers could continue as both beef and dairy producers give consideration to uneconomic cows ahead of autumn housing.

Positivity in the Store Cattle Trade

As the autumn store cattle sales come around, despite a good supply of cattle coming forward, demand is reported to be particularly robust. The combination of cheaper feed prices and the long term tight supplysituation may be giving finishers some confidence, contributing to the impetus in the market. In line with the finished trade, store cattle returns at GB auction markets this year have generally been behind year earlier levels, with continental types Suffering the most.

However, over the past couple of months, as the finished trade has started to recover, store cattle prices have increased. Hereford cross 18- month-old steers averaged £810 per head in September, up £65 since June. Demonstrating evidence of the interest in native-breed beef cattle, they are now dearer than at the same time last year. Continentals of the same age have moved up £150 over the same period, to average around £970 per head, but they are still modestly cheaper than last autumn. Despite the difficult market conditions this year, the expectation for finished prices into 2015 and beyond is still firm.

Nevertheless, as always, the opportunity for finishers to make a profit from store cattle will ultimately depend on them accurately budgeting the price they can afford to pay for their stock and controlling their on-farm finishing costs.

Sheep Weekly

Lamb trade strengthens in run up to Muslim festival

As anticipated, with the Muslim festival of Eid-al-Adha falling at the end of the week, there has been some considerable strengthening in the liveweight lamb trade since Monday 29 September.

With much improved demand for lambs ahead of the festival, the trade tipped in the producers’ favour after the usual pressure over the summer. As such, prices were as much as 11p/kg higher on the week, even with considerably higher numbers being marketed. At 156.8p/kg, the GB NSL SQQ for week ended 1 October was up nearly 8p/kg week on week.

Although prices began to turn last Thursday and Friday, the strongest trade day of the week was Monday 29 September, with the daily SQQ up 11p on the week, to 159.2p/kg. As the week progressed further, prices began to ease somewhat, however, although at 156.2p/kg on Wednesday 1 October, prices were still up 7p on the week.

These positive price increases were in spite of GB auction market throughputs for the week being up over a quarter, totalling over 153,000 lambs penned nationally.

Although increased demand for the festival improved the liveweight lamb trade, the cull trade didn’t experience the same uplift. As throughputs during the week increased 6%, the cull ewe price averaged £50.06 per head for week ended 1 October, down 62p on the week. With much of the uplift occurring from Monday onwards the deadweight SQQ for week ended 27 September was down 3p/kg on the week at 353.9p/kg. With the much sharper liveweight trade, the deadweight price for week ended 4 October should be stronger when it is published.

Growth in English flock evenly spread With the English breeding flock increasing as whole over recent years, the latest release of county level statistics from DEFRA give some insight into where this growth has come from. With overall ewe numbers in England reportedly increasing by 10% between 2010 and 2013, it is positive to note that most regions showed increases of between 8 and 12%. The exception to this was the Eastern region where there was only a 1% increase in ewe numbers.

However, with only 142,000 ewes, the Eastern region accounts for only 2% of the national flock. The South West region continued to have the largest >breeding flock with 1.54 million head, or 22% of the total England ewe population, with numbers increasing by 12% between 2010 and 2013. The next two largest flocks are in the North West (and Merseyside) and the West Midlands with 1.37 million and 1.06 million ewes respectively, this represents growth 9% and 11% since 2010. Of the other regions, there was a 12% rise in ewe numbers in the East Midlands, 10% rises in the South East and Yorkshire and the Humber, with the North East showing an 8% rise.

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