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AHDB Cattle and Sheep Weekly


10 April 2015

EBLEX Cattle and Sheep Weekly - 10 April 2015EBLEX Cattle and Sheep Weekly - 10 April 2015


Cattle trade continues to weaken

Deadweight prices for almost all cattle types were back for yet another week.

The R4L prices for steers and heifers saw a further cut of 3p and 4p respectively in week ended 4 April, resulting in average prices standing at 356.1p/kg and 354.5p/kg.

Following a cut of 6p/kg for young bulls meeting R3 specification in the previous week, the price recovered slightly to 336.5p/ kg.

As a result, the overall prime average price decreased to 346.6p/kg, a fall of just under 4p on the previous week. Overall prices have been on a downward trend for the last two months, with the prime average price for the latest week approximately 17p/kg lower than at the end of January.

Deadweight cow prices fell by 6p/kg too, indicating that the robust demand amongst processors for cows has weakened, while estimates of cow throughput were back by almost 800 head compared to the previous week, partly due to the Good Friday Bank Holiday.

Since Christmas, the demand for cows in the UK market has been driven by consumers demanding cheaper cuts of beef.

The current drop in cow prices could be driven by consumer demand decreasing for such products or a switch amongst processors to using prime beef as prices for that product decline.

Beef benefits from consumer switching

As fresh meat and poultry continue to be affected by deflationary pressure across the major categories, falling average prices supported sales of fresh beef.

In the latest three-month period, to 1 March, beef was the only red meat to record sales growth, both in volume and value terms, compared to a year earlier.

Switching has been a key factor behind the growth, with gains made from pork and lamb. The increase in sales was driven by higher purchases of roasting joints, which were 8% cheaper than in the corresponding period last year.

Price cuts were, however, big enough to offset the growth in volume sales, resulting in a fall in total consumer spending on roasting joints.

Mince also experienced a fall in the average retail price over the period, being 4% cheaper than last year. However, this did little to bolster volume purchases, which were only marginally up on the year.

Against a backdrop of heavy declines a year ago, stewing beef sales also increased. However, this masks significant difference in sales performance between retailers, largely as a result of changes in promotional activity.

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