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AHDB Cattle and Sheep Weekly


19 May 2014

EBLEX Cattle Weekly - 16 May 2014EBLEX Cattle Weekly - 16 May 2014


Substantial fall in cattle prices

Reflecting the continued imbalance in supply and demand, cattle prices remained under pressure for another week. In week ended 10 May, the deadweight GB all prime cattle price was back 7p on the week at 343.0p/kg. This represented the largest week-on-week fall recorded since July 2008. Similar declines were apparent across the regions of England, as the malaise has spread northwards, while in Scotland, although still back on the week, prices held up a little better.

With the season in transition it is possible that as yarded cattle supplies tail off, the balance in the trade could tighten and support prices somewhat. However, with the mild weather not stimulating demand for roasting cuts it is likely that, amid continued ample supplies, caution amongst processors could result in continued downwards pressure on price in the short term.

Looking further ahead, while BCMS data in April shows the continued potential for increased supplies in the short term it also demonstrates clear signs of lower availability later this year and into 2015. The number of younger cattle under 18 months of age on the ground is significantly back on the year. This means that a return to tight supplies of domestic prime cattle could be around the corner, which may have implications for the evolution of prices.

Cow prices again fared better than prime cattle, with reports of a modest amount of competition for better finished cows. In the latest week, the average cow price levelled for the third consecutive week at just ahead of 230p/kg. With grass plentiful in some areas there is the opportunity for producers to take advantage of this by adding weight and finish to those cows that they can. Consequently, numbers are unlikely to increase until the autumn.

Beef expenditure still robust

According to the latest data from Kantar Worldpanel shopper spend on beef remained strong in the February to April period, being up just over 3% on the year. This growth was driven by an increase in retail beef prices, which were up almost 8% against a year ago, though they have stabilised since January this year. Volume sales of beef continued to come under pressure, with sales down 4% year on year, although the rate of decline has eased slightly against the previous period.

The drop in beef sales was driven by a significant fall in purchases of stewing beef, which accounted for just over three quarters of the total fall in volumes. Reduced promotional activity on stewing beef meant that household penetration was down almost 5% points this period, with one major retailer alone experiencing volume declines of over 50%, compared with a year ago. In contrast, at a total market level, sales of frying/grilling cuts and mince were up, with the milder weather experienced this winter and spring a likely contributor to their stronger performance.

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