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AHDB Cattle and Sheep Weekly

24 April 2015

EBLEX Cattle and Sheep Weekly - 24 April 2015EBLEX Cattle and Sheep Weekly - 24 April 2015

Pressure on the prime trade continues

The combination of slow consumer demand and ample supplies of both domestic and imported beef continues to drive some restraint amongst processors and exert downwards pressure on the prime cattle market. Reports still suggest that cattle at the premium end of the market are proving hard to place, compared with the more commercial types. Consequently, in week ended 18 April, as prices for all classes of cattle fell, the deadweight GB all prime cattle price was back another 3p on the week at 339.5p/kg. R4L steers were down 2p on the week to 350.8p/kg, while heifers of the same specification fell 3p to under 350p/kg for the first time since late August last year. Young bull prices came under even more pressure. At 325.9p/kg the R3 average was back over 5p on the week earlier.

With this in mind, there is a risk that some animals at slaughter condition could end up being kept on farm longer than would be ideal, continuing to give rise to concerns that the trade is following the same evolution as last year. However, while demand may be no better, perhaps even worse this year, the expectation that there will be fewer cattle around on both sides of the Irish Sea could offer some support to the market in the medium term. Nevertheless, competition in the retail environment and the euro exchange rate could act as a lid on any notable upwards pressure.

The cull cow trade continues to fare better than the prime cattle trade with some moderate price stability. In the latest week, at 247.4p/kg the -O4L cow average was unchanged on the week as reports suggest that the supply/demand balance is just in producers’ favour, particularly for those animals with a better level of finish.

Higher price cuts take a greater share of the export mix

According to latest data from HMRC, beef and veal exports in February are recorded as being 20% back on the year at 7,900 tonnes. The decline was largely on the back of a drop off in trade to the Netherlands as shipments to Ireland and France were both higher. Despite the decline in volume, the continued shift away from fresh/chilled carcase shipments to higherpriced cuts was again evident. Boneless fresh/chilled shipments increased almost 30% on the year to account for two thirds of all the UK’s fresh/chilled trade. In February last year they made up under 40% of exports. With this product trading at around £4,000 per tonne, as opposed to £1,700 for fresh/chilled carcasses, it is clear how important this development is in continuing to deliver additional returns to the sector.

Imports were again above year-earlier levels. At 20,000 tonnes, volumes were up 14% on the year. There was a notable increase in product from Ireland; which remained competitively priced as sterling remained strong against the euro.


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