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AHDB Cattle and Sheep Weekly

24 February 2014

EBLEX Cattle Weekly - 21 February 2014EBLEX Cattle Weekly - 21 February 2014

Decline in cattle trade slows?

Following last week’s live weight trade, in which prime cattle values showed some uplift, the decline in deadweight cattle prices appears to have slowed. Reports suggest that strong promotional activity on some cuts ahead of Valentine’s Day contributed to firmer consumer demand. This played a part in restoring the supply/demand equilibrium to some extent, as numbers forward were estimated to be ahead of the week before.

In week ended 15 February, at 374.8p/kg, R4L steers levelled on the week, bucking the downwards trend in the year so far. Meanwhile both the overall steer and heifer averages showed their smallest declines of the year so far. For another week, young bull prices declined more significantly than other categories of prime cattle. This comes as processors continued to apply significant penalties onto some of these cattle which are outside market specifications. Meanwhile, demand for steers and heifers meeting tight supermarket specifications continues to be robust. Going forward, this continuing development may put the economics of finishing young bulls under even more pressure.

In contrast, the cow trade rebounded and prices increased for the first time this year. This came as numbers forward were lower than a week earlier and processors upped their market activity. With a greater proportion of better finished cows in the mix, the overall cow average price increased 4p on the week to average 223.4p/kg. Cull cow values at GB auction marts this week have been particularly robust; at 126.0p/kg beef-sired cows were up nearly 6p on the week.

Boneless cut exports continue to perform well

Largely as a result of significantly lower cow beef production, UK beef and veal exports for December were once again lower on the year. At 8,900 tonnes, volumes were back 15%, as trade to the two main destinations of Ireland and the Netherlands was significantly lower. Despite the trend of lower exports, shipments of higher valued chilled boneless cuts have performed better than the overall trade. In December, at over 3,800 tonnes, this segment represented 43% of all UK trade, a notable increase on the share in the corresponding month in 2011, the record year for UK beef exports. Despite lower cattle slaughterings in the month, exports of fifth quarter products did well again, being up 5% on the year at 2,800 tonnes.

Beef and veal imports in December were 9% higher than a year earlier, as shipments from Ireland increased by 8% year on year. In addition, higher shipments from a range of smaller suppliers were recorded, including Germany, Denmark, Australia, New Zealand, Namibia and Botswana. In contrast, shipments from a number of suppliers were lower. Notably volumes from Poland were back 5% on the year to just 651 tonnes, shipments from the Netherlands and Brazil were also lower.

A full review of last year’s trade performance is now available on the EBLEX website.

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