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AHDB Cattle and Sheep Weekly


13 October 2014

EBLEX Cattle and Sheep Weekly - 10 October 2014EBLEX Cattle and Sheep Weekly - 10 October 2014


Cattle Weekly

Some signs of stability in the beef trade

In week ended 4 October, the GB all prime deadweight average price edged modestly higher on the week, being up a penny to 348.4p/kg. The slowdown in the upward price movement for another week gives some indication that trade may be starting to level ahead of the onset of the Christmas procurement period.

Despite this overall trend, reports suggest that demand remains better and some processors have once again offered higher prices in order to secure adequate supplies. Despite the number of steers coming forward being broadly similar to the week before and well ahead of year earlier levels, in spec R4Ls increased a penny on the week to 360.0p/kg. R4L heifers were unchanged on the week at 356.3p/kg. In contrast, the overall young bull price fell 3p on the week to 324.5p/kg. However, bulls falling within the R3 specification increased 2p/kg to average 335.8p/kg, their highest price since early April. This differing trend suggests that penalties are still in place for bulls outside target specification.

The deadweight cull cow trade levelled again in the latest week, despite estimates suggesting that 600 more cows were marketed, compared with a week earlier. However, trading at auction marts this week has been more subdued, despite fewer cows forward, possibly a reflection of more difficult trading conditions in export markets on the back of the stronger pound.

Diverging trends in the Scottish cattle herd

The Scottish Agricultural Census has revealed that, in June, the total number of cattle in Scotland was back a fraction on the year to 1.79 million head. While the dairy breeding herd expanded, the much larger suckler herd, which is key to future prime beef supplies, fell again. The number of female beef cattle over two-years-of-age on the ground was back almost 2%, or 8,000 head, on the year. Indicative of the longer term tight supply situation, the number of female beef cattle between one and two-years-of-age was also reported to be lower on the year, as was the number of male cattle in this age bracket.

However, there was a sizeable increase in the number of male cattle over two-years-of-age, although this did not offset the decline in younger male cattle, as calf numbers were almost 1% back on the year. The modest fall in livestock numbers over the past year is not a surprise and can in part be attributed to higher costs reducing margins. Although part of a downward trend since the 1970s, the difficult winters of 2011/12 and 2012/13, along with the poor summer in 2012, may have further influenced decisions to cut back on numbers over this period. Since 2010, the beef breeding herd has fallen 7% or 42,000 head, while the dairy breeding herd is around 2% larger.

Sheep Weekly

Lamb trade eases following Eid-al-Adha

As demand slowed following the Muslim festival of Eidal-Adha, prices during the latter half of week ended 8 October began to ease, despite throughputs being considerably down. While the weekly SQQ was only a penny lower than the previous week, the daily SQQs on Monday and Tuesday were 4-5p/kg lower. However, the SQQ on Wednesday was only 2p/kg lower on the week at 153.5p/kg. The stronger trade earlier in the week came as the Muslim festival of Eid-al-Adha continued to drive demand.

However, from Monday onwards demand was evidently lower as the festival had finished. Following a sharp rise ahead of the festival, numbers were well down on the week, being 19% lower. Numbers on Wednesday 8 October in particular were much lower, being down 43% on the week, which may be the reason that the prices did not fall as much as on Monday and Tuesday. Scottish sheep numbers higher The Scottish Agricultural Census revealed that, in the year to June 2014, the overall Scottish flock increased in size for the first time since 2011. By June, the total number of sheep was 6.7 million, up by 122,000 head year on year.

Better weather conditions during 2013 and the spring of 2014 improved lambing and rearing rates, resulting in a 5% rise in the number of lambs on the year. However, this follows a lower number of lambs in 2013 and, at 3.27 million head, the number this year was almost exactly the same as it was in June 2012.

These higher lamb numbers support increases in both England and Northern Ireland (with the Welsh results also expected to show some uplift when published). As such, there continues to be the expectation that UK slaughterings will generally show year-on-year increases for the remainder of the season. While the total flock has reportedly increased on the back of increased lamb numbers, the breeding component of the flock has continued to fall. At 2.6 million head, the number of ewes previously used for breeding was down 0.5% on the year.

This continues to represent a long term decline in the flock, and is unlikely to stop in the short term as the industry continues to struggle with profitability and CAP reform is likely to result in lower support payments. The number of ewes that are expected to be used for breeding for the first time reflects this, showing a 4% drop on the year to 631,000 head.

 

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