AHDB Pig Market Weekly
11 June 2012
AHDB UK Market Survey - 8 June 2012
Easter is a key occasion for purchases of meat roasting joints, second only behind Christmas. However, last year the performance of roasting joints was somewhat muted as the particularly warm weather discouraged purchases across all species.
Increased promotions boost Easter lamb purchases
Easter is a key occasion for purchases of meat roasting joints, second only behind Christmas. However, last year the performance of roasting joints was somewhat muted as the particularly warm weather discouraged purchases across all species. In contrast, this year the weather over the Easter period was cooler providing a positive impact on purchases of some roasting joints, most evident for purchases of lamb legs.
The above chart highlights the year-on-year Easter performance for the main roasting joints. Lamb leg roasting joints were evidently the best performing having recorded a 34 per cent increase in volume purchases. This comes off the back of a poorer performance in 2011 when there were unseasonably low levels of promotional activity on lamb. However, the heavy promotional activity was back in evidence this year, with 42 per cent of lamb sold on promotion.
These promotions were effective in driving additional purchases of lamb leg roasting joints over the two-week period preceding Easter, compared with last year. Increased promotional activity has also boosted lamb sales in the post-Easter period. With over 57 per cent of leg roasting joints sold on promotion, during week ended 6 May, sales were up considerably both week on week and year on year.
Volume purchases of first quality beef roasting joints were down 13 per cent on the year, largely influenced
by a decline in promotional activity. During Easter, 30 per cent of first quality beef roasting joints were sold
on promotion; this was down from 41 per cent during Easter last year. Volume purchases of whole chicken
remained fairly static over Easter, but there has been a stronger performance during 2012 as a whole with
volume purchases up 12 per cent in the latest 12 week data.
Pork roasting joints recorded a seven per cent decline in purchases; this was largely influenced by the poorer
performance of leg roasting joints. The strongest performance for pork came from frying/grilling chops where
purchases increased 18 per cent. In the two-week period over Easter, 31 per cent of frying/grilling chops
were sold on promotion compared to 21 per cent last Easter. Leg roasting joints had lower levels of
promotional activity compared with last year and volume purchases were 19 per cent down. The higher
promotional activity on chops and lower average price in comparison to beef and lamb has helped drive
growth in purchases.
*Due to changes in the timing of Easter we could not directly compare standard periods and therefore
have compared the two weeks leading up to Easter in both years.
Cattle market trends
Prices
Deadweight cattle prices generally increased in
week ended 2 June. The all prime cattle average
increased marginally to 333.9p per kg. The overall
steer average increased almost a penny to average
335.8p per kg, despite those graded R4L falling over
a penny to 341.5p per kg. Overall the young bull
average was up by more than half a penny to
321.6p per kg, while the heifer average was up by
less than half a penny at 336.2p per kg.
Overall cull cow values were up despite those
graded –O4L falling on the week. At 267.4p per kg
the overall cow average was up almost three pence,
while the –O4L price fell over two pence to average
276.4p per kg.
The liveweight cattle trade appears to have been
buoyed by the Jubilee disruptions in week ended 6
June. This came as tightened supplies were met by
increased demand as processors looked to secure
supplies in advance of the bank holidays and then
restock following them. With fewer sales taking
place throughputs of prime cattle for the week were
down 24 per cent. Overall the prime cattle average
increased five pence to 190.8p per kg. This
increase was driven by a six pence increase in the
price of young bulls, while steer and heifer prices
both increased by over four pence.
The cull cow trade at GB auction markets was
subject to the same pressures with throughputs
down 41 per cent on the week and the overall
average up by over a penny on the week at 133.1p
per kg. Although this was purely driven by a four
pence increase in beef cow prices as dairy cows fell
almost three pence.
Consumption
During the 12 weeks ending 13 May 2012 fresh and frozen beef purchases declined five per cent year on year. In particular, roasting joints and frying/grilling cuts have declined 16 per cent and nine per cent respectively. Overall expenditure has increased seven per cent, which has mainly been driven by the 12 per cent rise in average price to £6.92 per kg. Beef roasting joints recorded the largest price increase, largely influenced by the lower levels of promotions compared with last year. In the past 12 weeks 20 per cent of beef roasting joints were sold on promotion compared with 29 per cent last year. The increased average price and reduction in promotions continue to provide consumers motivation to switch to cheaper protein alternatives, with whole chicken purchases up eight per cent compared with last year.
Sheep market trend
Prices
The deadweight SQQ in week ended 2 June reflected
the sharp declines that were being recorded in the
liveweight sales at the time. Overall the new season
SQQ for GB was down 41 pence at 400.5p per kg.
The liveweight trade in week ended 6 June bucked the
downwards trend of recent weeks with prices across
the period higher week on week. This uplift is likely
to be short-lived as it is attributable to the disruptions
to trade caused by the Jubilee celebrations and
ensuing bank holidays. Once normal trading resumes
expectations are that the seasonal decline will reassert
itself.
With processors looking to ure lambs ahead of the
weekend, Thursday’s SQQ recorded an increase of
eight pence to 198.3p per kg, although this was on the
back of a 23 pence drop on the previous Thursday.
Monday’s trade was severely disrupted with numbers
very low, resulting in a further increase as processors
started to try and restock. With a resumption of
trading on Tuesday there was strong demand, as
restocking activity intensified, resulting in the GB SQQ
increasing 19 pence on the week to average 200.6p
per kg. Prices on Wednesday were still up on the
week but the rate of increase was slower with an
increase of 11 pence week on week, although the
SQQ was little changed from the day before at 200.2p
per kg. Overall the SQQ for the week was up 14
pence on the week before having averaged 199.6p per
kg.
Consumption
In the latest 12-week period to 13 May 2012
purchases of fresh and frozen lamb increased six per
cent. This was largely influenced by the strong
performance of leg roasting joints over the Easter
period. There has been increased promotional activity
on lamb with 39 per cent sold on promotion over the
past 12 weeks compared with 27 per cent last year.
Shoulder roasting joints have recorded an eight per
cent increase in purchases year on year, while frying/
grilling cuts have declined compared with last year.
Total expenditure on lamb continued to grow
increasing seven per cent on the year to £158 million.
This was mainly the result of the increased volume
purchased as prices increased by only one per cent.
Despite increased volumes being purchased, market
penetration was lower than in the corresponding
period a year ago. With almost 38 per cent of
households purchasing lamb in the 12 week period
compared with 40 per cent in the corresponding
period of 2011.
Pig market trends
Prices
Due to the double bank holiday to celebrate the
Queen’s Diamond Jubilee, no Deadweight Average
Pig Price (DAPP) was published this week.
Elsewhere in Europe, prices have begun to increase
again as improved weather conditions have led to
increased consumer demand and supplies of pigs
remain tight in many EU Member States. The EU
average reference price has risen from €161.37 per
100kg in week ended 13 May to reach €165.18 for
week ended 3 June, an increase of over two per
cent. This is the highest level recorded since
October 2008 and is equivalent to 132.32p per kg,
around 13 pence lower than the latest UK
reference price.
As is often the case, the EU average price followed
a similar trend to the German one, which increased
by three per cent from mid-March to reach
€171.36 per 100kg in week ended 3 June. Prices
in neighbouring countries such as the Netherlands,
Belgium and Poland showed a similar rise. Other
than the UK, the highest price among major
producing Member States was in Spain. Its average
price reached €175.21 per 100kg in week ended 3
June, its highest level in nearly six years. This
comes despite a five per cent increase in Spanish
pig meat production in the first quarter, as steady
demand from domestic consumers has been
backed by strong export performance; Spanish pork
exports were up by 30 per cent year on year in the
first quarter.
Consumption
In the 12 weeks to 13 May 2012, household
purchases of fresh and frozen pork fell three per
cent. There were declines for the majority of cuts
with leg and shoulder roasting joints recording the
largest declines; down 15 and 17 per cent
respectively. This drop has been driven by a
reduction in promotional activity compared with
last year. As a result of this reduction the average
price paid by consumers increased by eight per
cent compared with last year. This increase was
the sole driver behind a five per cent increase in
expenditure on fresh and frozen pork, at £219
million.
Pork belly and loin roasting were the only two cuts
to record purchase growth year-on-year with
increases of six per cent and 41 per cent
respectively. In other products bacon purchases
were up nearly four per cent and chilled ready
meals increased by five per cent. In contrast
purchases of pork sausages fell by five per cent.
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