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AHDB Cattle and Sheep Weekly

03 March 2014

EBLEX Cattle Weekly - 28 February 2014EBLEX Cattle Weekly - 28 February 2014

Prime cattle trade stabilises as cows strengthen

Following a slowdown in the decline of deadweight cattle prices a fortnight ago, the prime trade in week ended 22 February demonstrated some stability. With supply and demand in a more balanced position, steer and heifer values were almost unchanged on the week, contributing to the all prime cattle average levelling at 363.9p/kg. Despite this, reports continue to suggest that there remain some significant pressure points in the trade, particularly for dairy-sired bulls outside supermarket specification, which continue to attract substantial penalties in many cases.

Analysis of the latest week’s throughputs indicates that, compared with the week earlier, a greater proportion of the young bull kill fell into fat class 1 or 2. This meant that, while better quality bulls increased in price, R3 up 3p and R4L up 9p, the overall young bull price was unchanged on the week at 325.2p/kg. This was a result of the increased proportion of cheaper, leaner animals dragging the average down, even though most of these categories were also higher on the week.

The cow trade strengthened for the second week in a row as numbers forward were tighter once again. At 228.5p/kg, the overall cow average price increased another 5p on the week to reach its highest position this year so far. With the stronger value of sterling making exports less attractive, it is possible that the domestic market will become increasingly important to the cow trade. Looking forward, the news that ready meals can be branded with the Red Tractor logo when they contain UK farm assured meat could result in a boost for manufacturing grade cow beef prices.

Higher weights mostly offset lower numbers

Entirely as a result of lower supplies in Northern Ireland and Scotland, total UK prime cattle throughputs were 1% back on the year, at 179,200 head. In contrast, England and Wales, throughputs were up 4% on the year. While UK heifer throughputs were back 1% and steers back 2%, the number of young bulls processed was up 2% compared with January 2013, as numbers in Scotland and Northern Ireland were significantly higher. As expected, with high culling early in 2013, adult cattle throughputs in January continued to be lower than year earlier levels, being down 8% at 59,000 head. This came as all regions of the UK recorded lower numbers.

Carcase weights for both steers and heifers were higher year on year during the month, offsetting the lower numbers of prime cattle to a large extent. As a result, production from prime cattle was similar to that in January last year. Slaughter weights of cows were significantly up on the year, averaging 11kg higher, as lower cereals prices may be offering the opportunity for producers to add some finish to cows. As such, despite the notably lower throughputs, production from adult cattle in January was back only 5% year on year. Consequently, overall UK beef and veal production for the month was back just 1% on the year at 81,100 tonnes.

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