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AHDB Cattle and Sheep Weekly

12 December 2014

EBLEX Cattle and Sheep Weekly December 2014EBLEX Cattle and Sheep Weekly December 2014

Cattle Weekly

Cattle trade edges up

In week ended 6 December, following stability in the previous week, the deadweight cattle trade edged up a fraction. With some modest variations in price across the different categories of cattle, the all prime average price was up just half a penny on the week at 353.2p/kg. This comes despite more cattle being forward, according to AHDB/EBLEX estimates. As such, the fact that the trade is still moving up, albeit modestly, provides evidence that the market remains robust. This continues to be welcome news for producers, especially as reports suggest that some processors now have adequate supplies in storage and much of the retail scheme buying for Christmas has ended.

Steers falling within the R4L specification levelled on the week at 365.7p/kg, while heifers of the same specification crept up to 363.4p/kg. In contrast, R3 young bulls made up most of what they lost last week, increasing over 3p on the week to average 337.0p/kg. While prime cattle are now trading at their highest point since April, prices are still some way behind year earlier levels. Price penalties are still very much in place for cattle not achieving the right grade or weight. Consequently, as the year comes to an end, and with a subdued start to 2015 a possibility, producers should be proactive in marketing their cattle at the right time in order to maximise returns. On the back of firmer demand, the cow trade bucked the trend of the past few weeks and in the latest week, at 225.5p/kg, the -O4L average was up 2p on the week.

Seasonal trend reflected in beef sales

According to the latest Kantar Worldpanel figures, the amount of beef purchased over the three months to 9 November has slowly been increasing in line with the usual seasonal trend. This increase has been particularly prominent in sales of stewing cuts, which have almost doubled over the three month period. However, despite this seasonally-driven upturn in performance, beef sales still remain down on last year’s levels as higher prices were reflected in the make-up of the shopping baskets of price conscious consumers. Compared to the same period a year ago, while the overall number of households buying beef was unchanged, shoppers bought smaller amounts on each trip.

The relatively high price of beef has continued to contribute to consumers moving towards fresh chicken and pork, both of which have recorded a fall in average prices over the year. Mince was the only beef product not to record a year-on-year increase in average price. This has been partly due to an increase in the volume of mince sold on promotion from certain retailers and a greater proportion of sales going through the hard discounters with their lower base prices

Sheep Weekly

Lamb trade moves up again

The liveweight lamb trade at GB auction marts strengthened again in week ended 10 December. With firm trading on most days in the week, amid the Christmas shows and sale season, at 191.0p/kg the SQQ was up over 9p on the week earlier. With prices gathering pace over recent weeks it would appear that some degree of seasonality has returned to the trade, something not evident on the run into Christmas for the past couple of years. Consequently this may be signalling that demand is performing somewhat better, possibly as the weather has turned colder. Prices peaked on Monday 8 December. The SQQ reached 194.3p/kg, up 13p on the week earlier. The cull ewe market continued its robust performance in the week, with the average price increasing £4 on the week to almost £69 per head. At this level, cull ewes are achieving significantly more than at the same time last year. GB daily liveweight SQQ, change on week Source: AHDB/EBLEX/LAA/IASS There was also much more movement in the deadweight price in week ended 6 December, as the deadweight SQQ increased 9p to 409.3p/kg. Since the beginning of November, this equates to a near 50p/kg increase as deadweight prices seem to be mirroring the strength in the liveweight trade seen in recent weeks. It means that the deadweight SQQ is now above its level a year earlier.

Lamb sales struggle

Lamb sales have been down on 2013 levels for much of the year so far. In the 12-week period to 9 November, consumers bought 12% less lamb than in the same period a year earlier, according to Kantar Worldpanel. Lower supplies of cheaper New Zealand product this year have had an impact on retail prices and, in turn, consumer demand, with three of the big four multiples experiencing a significant drop in the amount of lamb sold. The key driver of the latest results was lower purchases of roasting joints, following a strong performance in the autumn period last year.

Looking towards the Christmas season, pork was the only meat to record a growth in volume sales last year. Sales of lamb fell by over 5%, although an increase in the average price did support a small increase in expenditure. According to recent forecasts from IGD, spending on food and groceries is expected to increase by just over 1% this year. Lower food price inflation in recent months, coupled with promotional activity by leading retailers, has put some downward pressure on prices. However, on a more positive note, the FGD indicated that meat and poultry could benefit from an increase in consumer spending over the Christmas season, with 12% of shoppers surveyed by IGD saying they intended to spend more on meat and poultry this Christmas.

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