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AHDB Cattle and Sheep Weekly


08 October 2014

EBLEX Cattle and Sheep Weekly - 3 October 2014EBLEX Cattle and Sheep Weekly - 3 October 2014


Cattle Weekly

Prime cattle prices continue to strengthen

In week ended 27 September, the deadweight cattle trade once again demonstrated some modest strength. However, with another week-on-week increase in throughputs, reports suggest that trade was a little more balanced than of late. As such, the GB all prime deadweight average price increased just over a penny on the week to 347.8p/kg. Despite a slowdown in the rate of increase, solid processor demand continues to drive trade and this is the ninth consecutive week in which prices have increased.

Consequently, the GB all prime average in the latest week was 20p/kg higher than at the beginning of August. While prices are still around 45p/kg below year earlier levels, they are now tracking close to the levels of the same period in 2012 and have now returned to levels last recorded in early May of this year.

Despite the more favourable trading conditions persisting, with cattle coming forward in higher numbers it is possible that processors could become more selective as the trade moves towards the Christmas procurement period. Despite the trade still being reportedly good, against a backdrop of more cows coming forward this week, the –O4L cow average dropped 5p on the week to 241.3p/kg. It is possible that the trend of higher numbers could continue as both beef and dairy producers give consideration to uneconomic cows ahead of autumn housing.

Positivity in the Store Cattle Trade

As the autumn store cattle sales come around, despite a good supply of cattle coming forward, demand is reported to be particularly robust. The combination of cheaper feed prices and the long term tight supplysituation may be giving finishers some confidence, contributing to the impetus in the market. In line with the finished trade, store cattle returns at GB auction markets this year have generally been behind year earlier levels, with continental types Suffering the most.

However, over the past couple of months, as the finished trade has started to recover, store cattle prices have increased. Hereford cross 18- month-old steers averaged £810 per head in September, up £65 since June. Demonstrating evidence of the interest in native-breed beef cattle, they are now dearer than at the same time last year. Continentals of the same age have moved up £150 over the same period, to average around £970 per head, but they are still modestly cheaper than last autumn. Despite the difficult market conditions this year, the expectation for finished prices into 2015 and beyond is still firm.

Nevertheless, as always, the opportunity for finishers to make a profit from store cattle will ultimately depend on them accurately budgeting the price they can afford to pay for their stock and controlling their on-farm finishing costs.

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