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AHDB Cattle and Sheep Weekly

08 September 2014

EBLEX Cattle Weekly - 5 September 2014EBLEX Cattle Weekly - 5 September 2014

Prime cattle trade remains robust

For another week the deadweight prime cattle trade moved up. In week ended 30 August, with price rises across the board, the all prime GB deadweight average price increased another 4p on the week to 339.5p/kg and has now strengthened 13p/kg over the last month.

Robust competition for cattle has continued to drive some upwards pressure in the market as reports suggest demand is moderately ahead of current supplies. AHDB/EBLEX estimates indicate that prime cattle throughputs were back over 2,000 head on the week. With significantly fewer steers marketed, the overall steer average increased 3p to 342.3p/kg, while, R4L steers surpassed the 350p/kg threshold for the first time since mid-May this year, up 2p on the week at 350.3p/kg. Heifer prices followed similar developments, with the overall average up 2p on the week to 342.9p/kg. Continuing to benefit most from the more positive trading climate, young bull prices increased to the greatest extent. The R3 young bull price was up 8p on the week to 327.8p/kg; it has moved up 16p/kg from the low point in the year so far that occurred just 5 weeks ago. However, despite reasonable demand for young bulls under 16 months of age, the penalties outside this are still in force and remain the biggest deduction by most processors.

While the strengthening in the market on the back of tighter numbers continues to be better news for producers, as the number of cattle finishing off grass increases, there is the potential for a finer balance in the market to resume.

European male cattle prices stabilise

After a difficult few months, the EU male cattle market has shown some signs of stabilising in recent months. The R3 EU steer price has been largely in line with developments in the UK, which is not surprising given that the UK is the largest steer beef producer. By mid-August, the EU R3 steer price had moved up by over 1% since late June to average €361/100kg dw. UK steers continue to enjoy a premium - in mid-August it was around €30/100 kg dw, somewhat higher than the premium of €23 a year earlier but still down on the 2013/14 peak of €52 in early October last year.

Generally, since the beginning of 2013, the EU young bull market has been less volatile than the steer market. However, the UK R3 steer price premium over the R3 young bull price is now down to €60 having been as much as €100 in early October last year.

Gap between farmgate and retail price widens

With farmgate beef prices strengthening modestly on the month, while retail prices were virtually unchanged, the producer share of the retail price increased one percentage point during August to 47%. Despite this move upwards, the latest figure means that the producer share of the final retail price is still 7 percentage points lower than it was in January and 10 points back on its position in August last year.

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