AHDB Pig Market Weekly
22 June 2012
AHDB UK Market Survey - 22 June 2012
Weather issues have been the key driver of new crop grain prices
this spring.
Feed update
UK November 2012 feed wheat prices have recently been trading above £155 per tonne as markets become more anxious over 2012/13 supply levels. Weather in the US Eastern Corn Belt has been hot and dry as maize crops enter into key development stages. This is casting further doubt over the USDA’s current yield forecast, which until August, is based upon historical trend rather than crop condition.
Anxiety in the maize market, transfers directly into the wheat
market as these grains are substitutable with one another in
global feed rations. It is expected that wheat availability will
be lower in 2012/13 due to a number of weather issues. In
Continental Europe, winter kill and poor growing conditions
in early spring look set to put a check on production. In
Russia, dry conditions in mid-May fuelled speculation over
crop losses, but rain has arrived since. In Ukraine, winter kill
has slashed production forecasts for wheat, diverting land
toward maize. This may result in a record Ukrainian maize
crop with exports targeted at Mediterranean Europe.
For the UK, crops were seen to have good potential as at the
end of May. However, much of June has so far provided poor
weather conditions for crops. High disease pressure, lack of
sunshine and risk of lodging are all important factors as crops
start to build yield.
Protein meal prices remain well supported with UK soyameal
prices at record levels and in excess of £350 per tonne.
Following the drought impacted South American soyabean
crop earlier in 2012, US crops may also be suffering from the
extreme heat in the Corn Belt. Import demand from China
remains robust.
With so much variation in weather, markets await the clarity
of harvest as well as US plantings and stocks data on 29 June.
Cattle market trends
Prices
In week ended 16 June, the overall prime cattle
deadweight average price strengthened three pence
on the week to average 337.49p per kg. Reports
suggest that beef sales are following the changing
weather conditions and that the lack of available cattle
is resulting in processors struggling to source adequate
product. The price of all categories of cattle increased
week on week, with R4L steers and R4L heifers both
increasing three pence to average 346.0p and 343.8p
per kg respectively. The price of R3 young bulls
increased by four pence to average 331.5p per kg.
For the second consecutive week the price of –O4L
cows strengthened three pence on the week to reach
a year peak of 282.3p per kg. At this level –O4L
cows are 17 per cent dearer than they were in the
corresponding week in 2011.
The liveweight trade in week ended 20 June showed
a marked rise with the all prime average price
increasing two pence on the week to 191.9p per kg.
Steers were up two pence to 193.4p per kg while
heifers were over three pence dearer at 198.1p per kg.
The price of young bulls levelled on the week at
183.7p per kg. In contrast, and despite lower
throughputs, the average cull cow price at GB auction
markets eased over a penny on the week to 130.9p
per kg.
Regional slaughterings
Continuing the trend in the year so far UK prime
cattle slaughterings in May remained well below
2011 levels as supplies continued to be tight on
the back of lower calf registrations in recent years.
The decline in prime cattle numbers was evident in
most regions of the UK. In total prime cattle
supplies were back eight per cent on the year.
Heifer numbers recorded a decline of 11 per cent
year on year while steer throughputs fell one per
cent. Young bull numbers recorded the largest fall,
down 17 per cent, reflecting the low levels of dairy
male retentions in late 2010 and early 2011. In the
year to date slaughtering are back eight per cent
compared to the first five months of last year.
There was also a significant decline in the number
of cull cows slaughtered. At 42,000 head cull cow
numbers were back five per cent on the year. As
with prime cattle, in the year to date cow
slaughterings are also back on the year. At
232,000 head they are five per cent.
In May prime cattle carcase weights were higher
on the year while cull cow weights were slightly
lower. This mitigated the reduced throughputs to a
modest degree and overall beef and veal
production in May fell six per cent on the year to
69,400 tonnes.
Sheep market trends
Prices
Prime lamb prices remain unusually firm for the
time of year. The deadweight SQQ in week ended
16 June increased 15 pence on the week to reach
422.2p per kg. This represents the second
consecutive week on week rise at a time when
prices would traditionally decline.
Liveweight lamb prices in the week ended 20 June
also showed remarkable resilience and continued to
buck the expected seasonal decline. The end of last
week appeared to herald the resumption of the
seasonal fall with prices on Thursday 14 down eight
pence and on Friday 15 down five pence on the
week. Following the weekend, prices rallied
strongly and the SQQ on Monday, 18 June, was up
nine pence on the week. This was partly attributed
to some tightening of supply with throughputs nine
per cent down on the week. However there was
also evidently a greater demand for lamb present in
the market place.
The strong uplift in the trade on Monday
encouraged increased numbers as the week
progressed. This has put some check on prices but
they have continued to be higher than in the
previous week. On Tuesday 19 throughputs of
lambs increased 13 per cent on the previous week
with the SQQ four pence higher. On Wednesday
throughputs were up 20 per cent and the SQQ
increased by less than a penny. Overall the weekly
GB SQQ recorded an increase of over two pence on
the week to average 202.64p per kg.
Regional Slaughterings
At 757,000 head UK lamb slaughtering in May were
five per cent higher than in the corresponding
month in 2011. In England and Wales slaughterings
increased three percent, in Scotland they were up
16 per cent and in Northern Ireland they were up
38 per cent. The large increase in Northern Ireland
continues to be the result of fewer animals being
exported to the Republic of Ireland.
Lamb carcase weights, in May, were well above
2011 levels, up four per cent on the year to 19.8kg.
Much of this increase is attributable to the better
seasonal conditions for much of this year. However
there are also likely to have been some very heavy
old season lambs that had been retained in the hope
prices would improve. Adult sheep slaughterings
continue to be much lower than 2011 levels with
the total in May 11 per cent down year on year at
123,000 head.
With increased lamb numbers and heavier carcase
weights mutton and lamb production in May was
six per cent higher year on year at 18,400 tonnes.
Pig market trends
Prices
Deadweight pig prices continued their seasonal
upward trend during May. However, this slowed
in early June and in week ended 16 June the EUspec
DAPP levelled on the week to average
149.37p per kg. In recent weeks, the rate of
increase has been lower than during the spring of
2011 as poor weather reduced consumer demand
and the weaker euro reduced the competitiveness
of British pig meat.
The weaner market has been difficult during May
and early June, with finishers still reluctant to take
on higher numbers while feed prices remain high,
especially as these weaners will be finished in the
autumn, when slaughter pig prices tend to fall.
The average 30kg weaner price eased back by a
few pennies in week ended 23 June to £43.07
per head, its lowest level since early December
last year. At this price weaners are over two
pounds per head cheaper than they were in the
corresponding week in 2011.
Regional slaughterings
UK clean pig slaughterings in May were almost
six per cent higher than year earlier levels at
753,000 head. This increase was the result of a
seven per cent increase in English and Welsh
slaughterings and an eight per cent increase in
Scottish throughputs. In addition, slaughterings
in Northern Ireland were almost one per cent
higher on the year. This takes the year to date
UK figure to 4.16 million head an increase of four
per cent on the corresponding period in 2011.
Cull sow and boar throughputs at UK abattoirs
during May totalled almost 19,000 head. This
represented a marginal increase on AHDB
estimates for May 2011. In the first five months
of the year adult pig slaughterings are four per
cent ahead of 2011 levels at 109,000 head.
UK clean pig carcase weights in May were
marginally higher than in the corresponding
period of 2011 at 77.9kg while adult carcase
weights were two per cent lower on the year at
151.3kg. As a result of the increased throughputs
pigmeat production in May was six per cent
higher year on year at 61,500 tonnes and in the
year to date totalled 344,000 tonnes, up almost
four per cent on the year.
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