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AHDB Cattle and Sheep Weekly

13 July 2015

AHDB Cattle and Sheep Weekly - 13 July 2015AHDB Cattle and Sheep Weekly - 13 July 2015

Another significant gain in the cattle trade

With the trade once again being in a more favourable position for producers, in week ended 4 July deadweight cattle prices increased significantly across the board again.
A more advantageous supply/demand balance is continuing to drive the market, despite the improved prices of late bringing more cattle forward. At 31,400 head AHDB estimates suggest that numbers were up 1,800 on the week and ahead of year earlier levels for the first week since the end of April. Reports suggest that processors have been in the market more robustly, with cattle previously subjected to notable penalties, bulls over 16-months-of-age and prime cattle outside of supermarket specification attracting more favourable prices.

At 349.2p/kg the GB all prime average was up 6p on the week. This represents the most significant week-on-week uplift since the market turned its corner, and now means that it has strengthened almost 25p over the past six weeks.

Steers meeting target specification strengthened 6p to average 359.8p/kg. As such, they have now reached prices last seen in late March. Average steer values were also up 6p at 350.8p/kg. Average heifer values strengthened the same amount to reach 351.3p/kg, while R4Ls were up 5p at 357.9p/kg. Demonstrating the more robust demand for young bulls they were 8p dearer on the week at 339.3p/kg, to be at their highest level in the year so far.

Cull cow prices continue to be firm on the back of the continued good demand for manufacturing beef despite the strong pound against the euro continuing to make exports challenging. In the latest week competition in the cow trade was intense again with demand for the better finished cows driving upwards pressure in the trade. At 239.6p/kg the average cow price was up 3p on the week earlier, -O4L cows achieved 258.9p/kg, up 6p.

Liveweight lamb prices increase

Liveweight prices at GB auction markets have increased in the past seven days following the tight supplies in previous weeks and more robust demand, partly due to the Muslim festival of Ramadan.

Following three weeks of sharp falls, in week ended 8 July the NSL SQQ increased by over 6p on the week to 163.0p/kg. This left the difference in prices compared to last year at just under 16p, the smallest level since April. Prices were up throughout the week, with the SQQ on Wednesday 8 July up 5p on the week earlier at 162.9p/kg, which meant the year-on-year differential narrowed to just 6p.

Tighter numbers in previous weeks and an increase in demand in the build up to the end of Ramadan next week are reported to have supported prices. The higher prices in the week seem to have encouraged producers to bring more lambs forward, with throughputs at GB auction marts up by 27 per cent on the week earlier. Overall throughputs were one per cent higher than in 2014. However, numbers falling in the SQQ weight band actually fell, possibly suggesting more ‘out of spec’ lambs have come forward.

Despite the increase seen in the liveweight trade, the deadweight price continued to fall sharply. In week ended 4 July the deadweight SQQ fell by almost 37p on the week to average 349.3p/kg, its lowest level at this time of the season since 2010. To some extent, this fall has brought the deadweight trade into line with the live trade, given that it has held up much better in recent weeks. At this price the SQQ is a fraction below the all prime average deadweight cattle price, a situation that has not occurred at this time of the year in recent years. The last time the SQQ was below the average deadweight cattle price was in October 2013, although that was more a reflection of the high cattle prices in the aftermath of the horsegate revelations.

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