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AHDB Cattle and Sheep Weekly


03 November 2014

EBLEX Cattle and Sheep Weekly - 31 October 2014EBLEX Cattle and Sheep Weekly - 31 October 2014


Cattle Weekly

Further stabilisation in the prime cattle trade

In week ended 25 October, the prime cattle trade broadly levelled for another week. Despite AHDB/EBLEX estimates indicating fewer prime cattle came forward, compared with a week earlier, the GB all prime deadweight average stabilised at 348.7p/kg. For another week, this indicates that supply and demand are broadly matched. Steer throughputs were estimated to be back around 300 head on the week, while heifer numbers were back 400 head. Prices for cattle falling into target specification, were virtually unchanged on the week with R4Ls at 360.2p/kg and 359.1p.kg respectively. Despite this stability, reports suggest that, with processors gearing up requirements for Christmas, firmer demand is starting to filter through, in particular for those cattle with better confirmation.

 

Prospects of a firmer market next year

The latest AHDB/EBLEX forecasts for beef and veal indicate that 2015 will be a year of lower cattle availability and reduced production. Combined with robust exports and lower imports, supplies available on the UK market next year are forecast to be lower than in 2014. It means that the UK beef market should be under less pressure than it has been for much of this year and the possibility of firmer prices is improved. However, while the UK appears to be leaving the economic crisis behind, wage increases remain below inflation, which may continue to put consumers under financial pressure. In the short term, it seems possible that price-conscious domestic consumers will continue to drive towards cheaper shopping baskets, offering some challenge for beef consumption. Irish beef and veal production increases At 158,800 head, Irish cattle slaughterings in September were up 10%, or 13,900 head, compared with September last year.

With carcase weights staying higher, beef and veal production increased by almost 12% to 53,300 tonnes. While this is still a significant uplift on year earlier levels it is well behind the increases in the March to June periodwhen Irish cattle supplies were at their most abundant. However, price pressure on the Irish market has persisted, which continues to offer some risk that the price differential could impact on the UK market. The differential did narrow earlier in the year from the 70-75p/ kg high in autumn last year. However, in recent weeks, with UK farmgate prices edging up while Irish prices have broadly levelled, the differential has begun to widen again and has been consistently over 70p/kg in October so far.

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