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AHDB Cattle and Sheep Weekly

07 July 2014

EBLEX Cattle Weekly - 4 July 2014EBLEX Cattle Weekly - 4 July 2014

Some stability in GB prime cattle trade

In week ended 28 June, the deadweight cattle trade broadly levelled. Despite this, the supply/demand balance is still very narrow, with numbers in Ireland in particular still very strong (see below). Nevertheless, with GB slaughterings slightly lower week on week and the warmer weather acting as a modest stimulus to demand, the all prime average price was a fraction up on the week at 325.2p/kg. While average steer and heifer values both levelled, R4L averages increased, with heifers up a fraction to 333.4p/kg and steers up a penny to 339.0p/kg. Young bull prices increased across the board and, at 305.6p/kg, the overall average price was up almost 4p on the week.

The cull cow trade has recently been fairly robust, with reports consistently suggesting that there is strong demand for well fleshed cows. This is likely being helped by an increased requirement for manufacturing beef amidst the hotter weather of late. In week ended 28 June the average –O4L cow price increased a penny on the week to 246.5p/kg. AHDB/EBLEX estimates indicate that cull cow slaughterings have been behind year earlier levels for most of the year, a situation underpinning price stability in the trade. Despite this the strengthening pound and competition from poorer quality clean cattle could present some risk for the trade going forward.

Irish steer prices fall to three-year low

Following some stability throughout May, in recent weeks, the Irish R3 steer reference price has resumed a fairly steep downwards trajectory. At the equivalent of 290p/kg, the Irish R3 steer price in week ended 22 June was down 18p/kg since the end of May, to its lowest point since April 2011. The pressure on price in Ireland continues to be driven by much increased supplies and weakened consumer demand in key markets (especially the UK). Bord Bia figures for the prime cattle kill in Ireland in the latest week showed another significant increase.

With Irish prices falling sharply, the price differential with the UK trade has widened in the past couple of weeks. While it is still much narrower than at the turn of the year, it is fairly high in a historical context. Consequently, pressure on the GB/UK cattle trade is likely to persist as the two markets attempt to move closer to each other. Irish supplies show little sign of slowing in the short term, meaning increased volumes of cheaper Irish product will continue to be available to the UK market. Consequently, despite some stability of UK prices in the latest week, the resumption of any upwards pressure on price in the short term seems unlikely.

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