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AHDB Cattle and Sheep Weekly

02 September 2014

EBLEX Cattle Weekly - 29 August 2014EBLEX Cattle Weekly - 29 August 2014

Positive trading environment continues

Following recent price increases, in week ended 23 August the deadweight cattle trade moved up again. Playing some part in the upwards pressure on price, estimates suggest that the number of prime cattle forward was back 1,500 head on the previous week, although still ahead on the year. With reports suggesting that demand for domestic cattle has been more robust, processors have been more active in the market, meaning competition has intensified. At 335.9p/kg, the overall GB prime cattle deadweight average increased 4p on the week and has now moved up by 10p/kg over the past four weeks, as all classes of cattle have benefited from the tighter marketing conditions.

Although these recent price rises are certainly welcome for producers, the market could still be finely balanced as autumn approaches and the seasonal increase in throughputs occurs. As always, much will depend on consumer demand as the season changes and colder weather arrives.

Irish production increase slows in July

The combination of more cattle coming forward and higher carcase weights has resulted in some very significant yearon- year increases in Irish beef and veal production in the first half of 2014. However, at 138,200 head, cattle slaughterings in July were up just 1%, or 1,900 head, compared with July last year. With carcase weights staying higher, beef and veal production for the month still increased by 4% to 45,700 tonnes. However, this was the smallest year-on-year uplift in 2014 so far, well behind the double digit increases in the March to June period. With the UK by far the largest destination for Irish beef, reduced availability could in some part have contributed to the stability on the UK market during July.

While it could be interpreted that this slowdown in production offers better news for the UK industry, Irish cattle supplies are still relatively robust. The expectation is that there are around 40,000 more cattle set to come forward, compared with last year. While there was a short period of lower supplies in July, Irish cattle slaughterings have once again started to track ahead of year-earlier levels.

Consequently, with price pressure on the Irish market likely to persist, there is still some risk that the price differential could impact on the UK market. With Irish prices broadly leveling while UK prices have moved up, the differential has begun to widen and was close to 50p/kg in week ended 17 August. However, this is still lower than the high point of 70 to 75p in autumn last year.

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