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AHDB Cattle and Sheep Weekly


17 August 2015

AHDB Cattle and Sheep Weekly - 17 August 2015AHDB Cattle and Sheep Weekly - 17 August 2015


Another drop in cattle prices

Reflecting the short-term imbalance in supply and demand cattle prices have come under some pressure again. In week ended 8 August, for the second week in a row, the deadweight all prime cattle average was back 4p on the week earlier at 346.3p/kg. Processor requirements for commercial and scheme cattle appears to have slowed slightly on the back of adequate supplies and well-stocked chill rooms.

 

Despite this, estimates suggest that at 29,600 the overall number of cattle coming forward was around 2,000 head behind the week earlier. Steer numbers were significantly back on the week earlier, but R4L steers were still down 2p to 359.2p/kg. In addition, while the number of heifers estimated to have been marketed fell around 700 head, at 358.6p/kg, R4L heifers were also back another 3p week on week. In contrast, young bull numbers were up around 200 head on the week, and at 338.3p/kg, those graded R3 were also back 3p on the week earlier. It is worth noting that, while prices have come back over the past couple of weeks they do still remain notably ahead of the five-year average for this time of the year.

Looking ahead, with such a fine balance in the trade and the expectations that cattle supplies are set to tighten, the balance in the trade could revert quickly to one more favourable for producers. However, on the flip side, with the holiday season in full swing the demand for roasting cuts is unlikely to feel any stimulus. Consequently, it is possible that caution amongst processors could persist, at least in the short term.

Cow prices came back again. At 11,200 numbers were up 1,200 head on the week earlier and again significantly higher on the year. Over the past six weeks over 10,000 more cows are estimated to have come forward, tipping the balance between supply and demand at a time when exports are problematic as a result of the sterling/euro relationship. Overall, cows averaged 216.5p/kg in the latest week, back 8p on the week earlier and a significant 24p over the past four weeks. This means, prices have fallen to be below year earlier levels, which marks a turnaround for the trade of late, having spent much of the summer so far up on the year earlier.

Liveweight trade falls as numbers increase

Following the uplift in prices seen last week, the lamb trade at GB auction markets has fallen back as higher numbers come through.

In the week ended 12 August, the GB SQQ fell by 7p to 150.9p/kg, following higher numbers coming to markets. This left prices over 15p below the level seen in 2014. However, prices remain above levels seen two weeks previously, which was the last week unaffected by the No Lamb Week campaign. Prices have fallen back below 150p/kg in recent days, with the SQQ on Wednesday 12 August down to 147.4p/kg, 13p down on the week.

Throughputs at GB markets increased by 18 per cent on the week as the higher prices last week led to more producers marketing their animals, while those that held their lambs back last week because of the No Lamb Week campaign started bringing them to markets. This meant that throughputs were up two per cent on levels seen in 2014. Almost 19 per cent of throughputs were outside of the SQQ weight bands, suggesting more producers have continued to hold on to lambs in search of higher prices.

There was some uplift in the deadweight trade following the increase seen in the live weight trade last week. In the week ended 8 August, the dw SQQ was up by 11p at 339.1p/kg. This period included the whole of the No Lamb Week campaign which could potentially explain these increases. Prices were still 44p lower than the same period in 2014, however.

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