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AHDB Cattle and Sheep Weekly

22 October 2014

EBLEX Cattle and Sheep Weekly - 22 October 2014EBLEX Cattle and Sheep Weekly - 22 October 2014

Cattle Weekly

Modest gain in the cattle trade In week ended 11 October, the deadweight cattle trade moved in a positive direction again. This was despite reportedly steadier trade and throughputs estimated to be up on the previous week taking them to their highest level so far this year. With the market appearing to be still benefiting from good demand, the GB all prime deadweight average price increased by over 1p to 349.6p/kg, very close to the 350p/kg threshold last seen at the end of April.

Despite around 1,000 more steers coming forward, R4Ls strengthened over 1p to reach 361.2p/kg. With the season changing and the number of cattle off grass falling away, there is the possibility of tighter numbers ahead before yarded cattle start to come forward in increasing numbers. This has the potential to add some impetus to the market but could be tempered by the opportunity for retailers that the increased production in Ireland still offers. UK beef exports perform well in August Latest data from HMRC indicates that UK beef and veal exports performed well in August. Increased production in the month meant that, at 9,000 tonnes, shipments increased over 1,800 tonnes on the year.

While the two main export destinations, Ireland and the Netherlands, both increased their volumes, the key driver was smaller markets, including Italy, Belgium, Greece and the Czech Republic. Fresh/chilled shipments still accounted for around 80% of all exports but there was a further shift away from carcase shipments to higher-priced cuts. Consequently, despite the unit value of exports being back overall, the value of the export trade was still up 10% to £30.8 million.

 Beef and veal imports were above year earlier levels for the first time since May. There was a return to a significant uplift in imports from Ireland, up almost 20% on the year. The unit value of Irish product continued to be cheaper year on year. In contrast, shipments from the Netherlands were unchanged on the year, while they were lower from many of the smaller suppliers. EU meat production EU meat production is set to return to growth this year following two years of contraction, according to the EU Commission’s latest Short Term Outlook report.

The expected increase in beef production follows three years of decline and is mainly driven by the increase in the dairy herd in anticipation of the abolition of dairy quotas. In addition, lower feed costs and good forage quality is likely to result in higher carcase weights. The situation at member state level, however, is very diverse and mainly depends on the level of rebuilding of dairy herds. A more detailed picture will be available following the meeting of the EU Commission beef forecast group on Monday.


Sheep Weekly

Lamb trade holds up In week ended 15 October, the lamb trade at GB auction marts held up somewhat. At 152.6p/kg the SQQ was back just 3p on a week earlier. While prices in the early part of the week were back significantly on the stronger trade of the week before, which was influenced by Eid-al-Adha, prices from Monday onwards have held up better. Despite significantly more lambs forward on Monday, the SQQ was virtually unchanged on the week at 154.3p/kg.

Numbers on Tuesday and Wednesday were also well up on a week earlier but prices eased only modestly, suggesting the downwards pressure of the weeks before Eid may have diminished. However, with the weather turning, it is possible that more lambs could come forward, increasing pressure on price, especially if sterling starts to strengthen again. Ultimately, as always, much will depend on consumer demand.

 The deadweight trade has demonstrated some stability of late, with the SQQ in week ended 11 October virtually unchanged for the second consecutive week at around 354.0p/kg. Sheep meat imports up in August Imports during August were reported to be up 2% on the year. At 5,900 tonnes, this is the highest volume in August since 2008. The key driver was increased shipments from New Zealand, up 14%, and Australia, 15%. These were offset by lower volumes from Ireland and the Netherlands.

Notably, there was a considerable increase in the volume of frozen bone-in cuts, which accounted for over half of sheep meatimports, compared with 40% last August. In the month, the average value was up almost 20% on the year at £4,320 per tonne, with product from all locations more expensive.

 Sheep meat exports were reported to be back 5% on the year at 8,600 tonnes. This was largely due to a decline in trade to France. Despite this, fresh/chilled cuts still performed well, more than doubling on the year and accounting for 20% of all trade to France. In contrast, trade to most other EU markets performed well, as did shipments outside the EU. It should be noted that earlier this year data has been revised significantly, so these results remain subject to change.

Grain Market Outlook AHDB/HGCA’s flagship Grain Market Outlook Conference took place in London on Tuesday. Presentations from the event are available on the HGCA website here. At the conference, a new daily publication on the cereals and oilseeds market was launched. The AHDB/HGCA Grain Market Daily will be published at lunchtime from Tuesday-Friday, with the existing weekly Market Report still being published on Monday.

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