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AHDB Cattle and Sheep Weekly

27 July 2015

AHDB Cattle and Sheep Weekly - 27 July 2015AHDB Cattle and Sheep Weekly - 27 July 2015

Uplift in cattle prices slows down

In week ended 18 July, while deadweight cattle prices moved up again, it was to a much less significant degree than over the past few weeks. With reports that the balance in the trade last week was much more finely matched than it has been throughout June and July so far, the GB all prime average was up 1p on the week earlier, at 354.8p/kg. Steers meeting target specification strengthened a penny on the week to average 366.2p/kg, while R4L heifers were up 2p at 365.0p/kg. R3 young bulls were 3p dearer at 348.3p/kg.

At 30,800 head, AHDB estimates suggest that numbers coming forward were behind the week earlier, steers back 200 head, heifers 700 and young bulls 400. With the indications of a more balanced trade, it is possible that producers with cattle ready to sell have been satisfied with prices on offer. This may well be a reflection of the time of the year, with harvest having started and producers’ attention drawn to other on-farm activities.

Looking ahead, while the demand side of the equation is clearly critical to domestic price developments, equally so is the forecast for supplies. The latest forecasts for the UK will be published next week and are expected to show a tight supply position in the second half of this year. Current indications for production in Ireland are similar, despite a surprisingly healthy supply of cattle coming forward in recent weeks.

In the latest week, the cow trade eased. At 253.9p/kg, the -O4L average cow price was back 5p on the week despite reports suggesting that robust demand persists for the heavier well fleshed cows. The strengthening value of Sterling may well have had an impact on the trade given the commodity nature of the cow trade on the continent. At the end of last week, the pound reached its strongest level against the Euro for nearly eight years.

Downward pressure continues on the lamb trade

Despite a fall in the number of lambs coming forward, the liveweight lamb trade at GB auction marts is still under pressure.

In week ended 22 July the NSL SQQ was down by over 6p on the week at 151.0p/kg. The weakness of the euro persists, limiting returns that can be gained from exports, while demand continues to be sluggish. This leaves prices almost 27p/kg below levels seen last year and at the lowest level for this time of year since 2009. Downwards pressure on the trade intensified as the week progressed, with the SQQ falling below 150p/kg on Wednesday 22 July at 146.1p/kg, down almost 8p on the week.

This drop came despite a fall in the number of lambs marketed in the week, falling by 12% on the week earlier. Possibly the falls in the trade seen in previous weeks have put producers off bringing lambs to market as numbers were back 11% on the year. The percentage of lambs falling outside of the SQQ continues to be up on the year, with 14% of the lambs sold in the last week falling outside of the SQQ band compared to just 8% at the same time last year. This suggests producers could be holding on for higher prices, causing weights to increase, pushing lambs outside of the premium price range.

Deadweight prices were also down in the week ended 18 July but falls continued to be on a smaller scale than the liveweight trade. The deadweight SQQ fell by less than 2p to 345p/kg as the difference compared to last year continued to narrow to less than 50p following sharper falls in the equivalent week in 2014. This is the lowest price since February 2013 and the lowest level seen in July since 2009.

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