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AHDB Cattle and Sheep Weekly

26 January 2015

EBLEX Cattle and Sheep Weekly - 26 January 2015EBLEX Cattle and Sheep Weekly - 26 January 2015

Strengthening prime cattle trade continues

In week ended 17 January, the GB all prime deadweight average price was up another 2p on the week to 363.9p/kg. The usual January slowdown in consumer demand has not, as yet, had an impact on the trade, despite estimates suggesting that throughputs are up on the week before. The overall GB deadweight steer price increased 2p on the week to 365.5p/kg, while those falling within the R4L specification reached their highest point in almost a year at 374.9p/kg. Heifer prices followed a similar trend with the overall price also increasing 2p on the week earlier to 368.2p/kg.

The cull cow market demonstrated some stability, with the overall GB deadweight cow price almost unchanged on a week earlier at 222.0p/kg. This levelling comes despite slaughtering estimates indicating around 700 more cows came forward, compared with the previous week. Despite trade demonstrating robust demand at the moment, reports are starting to suggest that cow prices are becoming more wide ranging, with significant differentials emerging between beef and dairy sired cows.

Increased numbers of steers drive production up again

Despite the festive disruptions, UK prime cattle slaughterings in December were up 3% on the year again at 140,500 head. Higher steer throughputs in all regions of the UK continued to primarily drive the yearon-year increase, although heifer numbers also tracked above year earlier levels except in Scotland. For another month, young bull throughputs were back on the year. At 12,500 head, they were down well over a third, compared with December 2013, to be at their lowest monthly level since records began in 1985.

Young bull throughputs have been significantly back on the year earlier for most of 2014. With a compensatory increase in the steer kill, it has become clear that many more males have been castrated. Most likely a reaction to the imposition of significant age and weight penalties for un-castrated males, this development will be looked at more closely in the January edition of the Cattle and Sheep Update, published next week.

Overall, adult cattle throughputs were up significantly on the year. While trade has been relatively firm, especially for cows of beef origin, it is possible that the challenges in the dairy sector could have led to an increase the number of cows coming forward. However, it is too early to ascertain a realistic picture of developments.

With steers and heifers over wintering well on reasonably priced fodder, their carcase weights were higher than in December last year. Combined with increased throughputs, at 63,400 tonnes, beef and veal production was up 7% year on year. This takes production for 2014 as a whole to 878,000 tonnes, an increase of 4% on the year.


Lamb trading remains robust

In week ended 21 January, the lamb trade at GB auction markets was largely unchanged on the week, with the SQQ levelling at 191.0p/kg. After picking up over the weekend to end Monday 19 at almost 193p/ kg, by Wednesday 21 the SQQ had dipped almost 4p to 189p/kg. This is the first indication that the positivity in the trade evident in the last few weeks could have cooled. However, lambs continue to trade around 10p ahead of year earlier levels.

Mirroring the liveweight trade, the deadweight SQQ is also still tracking above last year. At 423.6p/kg in week ended 17 January, the SQQ moved up 4p on the week earlier to be around 30p ahead on the year. R3L lambs averaged 428.9p/kg, demonstrating the reward to producers for marketing in-specification lambs. It is worth noting that, although estimates suggest that lamb throughputs were lower than a week earlier, they remained up on the year, in line with the anticipated increased number of lambs on the ground.

Lamb slaughterings up again in December

At 1.13 million head, UK lamb slaughterings in December were 5% up on the year. This continues to give evidence that some lambs have been slower to finish, given the lower than expected throughputs between August and October and the higher numbers in November and December. The uplift was entirely as a result of an increase in lamb slaughterings in England and Wales as, for the third month in a row, throughputs in Northern Ireland and Scotland were both lower than in 2013. This level of throughputs supports the expectation that there has been a notably bigger lamb crop this season. December represents the ninth consecutive month in which throughputs have been higher year on year. In the June to December period, lamb slaughterings are now up 420,000 head on year earlier levels. In the year as a whole, lamb slaughterings were up 3% on 2013 at 12.85 million head.

With less pressure to sell than in 2013, adult sheep slaughterings in December were back over a quarter on the year at 123,000 head. Despite this, sheep meat production was still up 1% on the year at 24,500 tonnes. This is reflective of the increased lamb throughputs and higher carcase weights, on the back of more favourable feeding conditions. This took sheep meat production for the year as a whole to 298,200 tonnes, up 3% on 2013 levels.

Further fall in New Zealand quota usage

New Zealand utilisation of its EU sheep meat quota fell to below 70% in 2014 and probably represented an unprecedented low. Further details in the next edition of the Cattle and Sheep Market Update, out next week.

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