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AHDB Cattle and Sheep Weekly

26 May 2015

EBLEX Cattle and Sheep Weekly - 26 May 2015EBLEX Cattle and Sheep Weekly - 26 May 2015

Pressure on price starting to ease?

Despite supply and demand still being very finely balanced, it looks like the pressure on deadweight cattle prices may be starting to show signs of easing. In week ended 16 May the GB all prime average was 324.8p/kg. Representing less than a 3p fall on the week, this marked a slowdown in the rate of decline, being the smallest fall since mid-March. However, it does still mean the average price has edged further below the five -year average for the time of year. Reports suggest that, despite some starting to feel the impact of tightening supplies, processors are continuing to take a cautious approach to procurement. Steers meeting R4L specification came back 3p on the week earlier to 335.5p/kg, while heifers of the same specification were 2p cheaper at 334.5p/kg. R3 young bulls were also back 3p on the week at 313.7p/kg.

The expectation of tightening supplies as the summer approaches is supported by recent data from BCMS which indicates that the number of beef-sired cattle on the ground in the imminent slaughter age range is notably lower than at this time last year. This suggests that the balance in the trade could move into a position that is less out of kilter fairly quickly, particularly as the season is in its transitional period between yarded and grass-fed supplies.

However, with the current fine weather unlikely to stimulate demand for roasting cuts, caution amongst processors could persist in the short term. Coupled with the euro exchange rate and its impact on the competitiveness of imported product, this may well keep a lid on the trade.

Lower production again in April

UK prime cattle slaughterings in April were back almost 3% on the year at 183,600 head. A reduced number of young bulls and heifers forward offset higher steer throughputs. For another month the year-on-year uplift in steer numbers slowed down, giving more evidence that supplies are beginning to tighten. The impact of increased castrations continues to have a bearing on the overall slaughter mix. With young bull throughputs back a quarter on April 2014, their share of the slaughter mix was just 9%. Adult cattle throughputs were up on the year again, being 2% higher at 47,700 head. For another month this is a result of an increase in the number of cows coming forward. Despite this, beef and veal production was back over 2%, on the year at 80,600 tonnes.

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