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AHDB Cattle and Sheep Weekly


04 August 2014

EBLEX Cattle Weekly - 1 August 2014EBLEX Cattle Weekly - 1 August 2014


Further stability in the beef trade

In week ended 26 July, deadweight cattle prices steadied again. The overall GB all prime average remained around the 325p/kg mark. The balance in the market is partly down to fewer cattle coming forward, compared with a week earlier, although supplies were still ahead year on year. Reports suggest that, with good conditions continuing, more producers may be holding on to cattle if they are able, while processors continue to manage their stocks carefully. However, there was some indication of firmer demand for cattle reaching target specification, with R4L steers and heifers both up 2p on the week. In contrast, the average price of young bulls came back almost 5p.

Following a similar pattern to the deadweight trade, prices at GB auction marts also demonstrated some stability. In week ended 30 July, the GB all prime price fell just a penny on the week to 174.3p/kg.

Despite Irish supplies having eased in the past couple of weeks, the strength of the pound may be limiting export opportunities and making imports more competitive. A combination of this and the challenges of carcase balance facing processors means that it looks likely that the market will remain finely balanced in the short term.

Supplies still forecast to tighten up

Little changed from previous positions, the latest AHDB/EBLEX forecasts for beef and veal still indicate the situation for the second half of the year and into 2015 is one of lower availability. With more domestic supply and the well documented increase in production in Ireland having an impact on imports, the UK beef market has been under pressure in 2014 so far. Looking ahead, the forecasts for availability later this year and into 2015 offer a more positive picture.

With lower production, increased exports and lower imports, supplies available on the UK market next year are forecast to be lower than in 2014, meaning that the possibility of firmer prices is improved. However, as always, much will depend on how demand responds, particularly once the holiday season is over and the weather begins to turn colder.

Further analysis of these forecasts can be found in the July edition of the Cattle and Sheep Market Update.

US cattle herd continues to contract

The United States Department of Agriculture (USDA) has reinstated the July Cattle inventory report this year after federal government spending cuts meant it was removed from production in 2013. The latest report shows that the national cattle herd has continued to contract. Lower breeding stock numbers have been reported, indicating it may be some time before the US cattle herd returns to an expansion phase. Lower beef and veal production this year and next is likely to continue to translate into historically high beef prices for consumers. More details are available on the EBLEX website.

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