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AHDB Cattle and Sheep Weekly


11 May 2015

EBLEX Cattle and Sheep Weekly - 11 May 2015EBLEX Cattle and Sheep Weekly - 11 May 2015


Continued pressure in the trade

In week ended 4 May with the supply/demand balance continuing to be unfavourable for producers, the sustained pressure on the deadweight cattle trade continued. For another week the rate of decline showed no signs of slowing down. Prices for all types of prime cattle were back on the week and consequently, the overall GB prime cattle average price was back by another 4p to average 332.0p/kg. The all prime average has now fallen 15p over the past four weeks.

Unsurprisingly, concerns about the evolution of prime cattle prices is continuing. With the all prime average just 7p/kg ahead of the low point in the summer last year comparisons are unavoidable with that period when the supply/demand balance was also very unfavourable for producers. However, in contrast to last year, supplies in the UK and Ireland will both start to tighten up as the year progresses, which in the broad picture does offers some support to the market. However, there continues to be a downside risk, particularly for the shorter term, due to some of the challenges in the highly competitive retail environment and the strength of sterling against the euro.

The cull cow trade has recently been fairly robust, with reports consistently suggesting that there is strong demand for well fleshed cows. This is likely being helped by an increased requirement for manufacturing beef amidst the finer weather of late. However, in week ended 2 May the average –O4L cow price came back 2p on the week earlier to 247.9p/kg, despite fewer cows coming forward. The strengthening pound and competition from poorer quality clean cattle could be presenting some risk to the trade.

Lower prices support roasting joint sales

According to the latest data from Kantar Worldpanel, in the 12-week period to 29 March, beef sales recorded growth in both value and volume terms, compared to the corresponding period a year earlier. Consumers again demonstrated some switching into the beef category, away from fresh pork and frozen chicken.

Sales of roasting joints in particular were notably higher than last year. While this would have been partially influenced by the earlier Easter holiday this year, it was also aided by lower prices. Average prices were almost 10% down year on year, with two of the Big 4 supermarkets in particular offering significant temporary price reductions over the period. However, this mitigated the overall expenditure increase on roasting joints to some extent. Sales of stewing and frying/grilling cuts both recorded higher growth in value than volume, with prices generally higher than a year ago.

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