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AHDB Cattle and Sheep Weekly

20 February 2015

EBLEX Cattle and Sheep Weekly - 20 February 2015EBLEX Cattle and Sheep Weekly - 20 February 2015

Modest easing in the prime cattle trade

In week ended 14 February, the prime cattle trade edged back on the previous week again. With estimates suggesting that the number of cattle coming forward compared with the week earlier was a fraction lower, suggests that some buyers have been more selective. Consequently, and to no surprise, commercial cattle out of supermarket specification have felt the pressure most. However, the overall GB prime cattle average price came back just over a penny on the week to 359.8p/kg. While steers came back a fraction to average 361.5p/kg, heifers were down 2p at 363.4p/kg and young bulls averaged 6p lower than last week, at 323.9p/kg.

Cow prices were firm for another week buoyed by robust domestic demand for cheaper cuts of beef as consumers continue to feel the after effects of the Christmas season. The overall GB deadweight cow price was up another 2p on the week to average 226.7p/kg, while -04L cows strengthened 4p to reach 244.1p/kg. This comes as slaughtering estimates indicate around 1,000 fewer cows came forward compared with the previous week and demand remains particularly firm for well fleshed suckler culls.

Beef and veal exports perform well in December

According to latest data from HMRC, on the back of increased production, beef and veal exports in December are recorded as being up 13% on the year at 10,300 tonnes. Shipments to Ireland increased significantly, while those to the Netherlands were back 15% on the year.

Trade to the smaller markets was varied: lower to France and Italy but higher to Greece and Denmark. In line with recent developments, the largest year-on-year growth in shipments was recorded to Hong Kong. Combined with the continued shift away from fresh/chilled carcase shipments to higher-priced cuts, this meant that at £34.9 million, the value of trade in December was up 6% on the year. The more positive performance in recent months means that, in the year as a whole at 112,000 tonnes, exports are up 6% on the year, returning £375 million to the UK industry.

Imports were again significantly above year-earlier levels, being up 13% at 26,400 tonnes. There was a return to notable uplift in product from Ireland, although it was only modestly cheaper than in the corresponding month last year. For the year as a whole, imports totalled 255,000 tonnes, their highest volume for 10 years.

Increased Irish beef production last year

Beef and veal production in Ireland last year was up almost 13% at 582,000 tonnes. Inevitably this resulted in increased exports, particularly to the UK, which contributed to the pressure on the market. This year it is expected that the pressure from Irish supplies should ease considerably. Read more about this on the EBLEX website.

Lamb trade still relatively firm

With prices continuing to track around last year’s position, for another week the lamb trade has demonstrated some degree of positivity. In week ended 18 February, with fewer lambs coming forward at GB auction marts, the trade appeared to be finely balanced and the SQQ levelled at 189.6p/kg. By the end of the week, prices were still robust, with the SQQ on Wednesday 18 February being up a penny on the week at 187.9p/kg. Firm prices have also continued into Thursday, with the provisional (5pm) SQQ just edging over 190p/kg. The cull ewe market at auction is also continuing its positive performance. Despite more cull ewes forward, the average value in week ended 18 February was still around £75 per head, significantly ahead of this time last year.

Also still tracking above year earlier levels, the deadweight lamb trade has also been robust in the latest week. Despite estimates suggesting that more lambs came forward compared with the week earlier, the SQQ moved up 13p to average 424.4p/kg, trading around 10p higher year on year. Combined with the robustness in the liveweight trade, this indicates that demand for sheep meat in general at the moment is relatively strong. As we head towards Easter, this may generate some optimism amongst producers.

Sheep meat imports lower in December

According to latest HMRC data sheep meat imports in December were reported to be back 15% on the year at 5,800 tonnes. This came as increased shipments from New Zealand were more than offset by significantly lower imports from Australia and Ireland. The data indicates that the 6% increase in volumes from New Zealand was largely a result of another notable increase in shipments of fresh/chilled legs. The consequence of the increased volumes of legs from New Zealand was that they accounted for 54% of the overall import mix, significantly more than the 43% share in the corresponding month last year. For the year as a whole, a reduced New Zealand lamb crop and the continuing emergence of China as a key market for the global trade mean that UK sheep meat imports were down around 6% year on year at 92,400 tonnes.

The export data for December may not fully reflect the true picture again, showing a decline to the three main markets of France, Hong Kong and Germany. With farmgate prices continuing to hold up against the backdrop of more lambs being marketed, intelligence would suggest that the data in recent months does not reflect the progression of trade.

Irish lamb production edges up in 2014

With a bigger lamb crop in Ireland throughputs last year are reported to be a fraction up on the year at 2.5 million head. A recovery in carcase weights has offset a decline in adult slaughterings to some degree and consequently sheep meat production in the year edged up 1% to amount to 58,000 tonnes. More analysis on sheep meat production in Ireland last year and the outlook for this year is available on the EBLEX website.

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