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AHDB Cattle and Sheep Weekly


17 August 2015

AHDB Cattle and Sheep Weekly - 17 August 2015AHDB Cattle and Sheep Weekly - 17 August 2015


Another drop in cattle prices

Reflecting the short-term imbalance in supply and demand cattle prices have come under some pressure again. In week ended 8 August, for the second week in a row, the deadweight all prime cattle average was back 4p on the week earlier at 346.3p/kg. Processor requirements for commercial and scheme cattle appears to have slowed slightly on the back of adequate supplies and well-stocked chill rooms.

 

Despite this, estimates suggest that at 29,600 the overall number of cattle coming forward was around 2,000 head behind the week earlier. Steer numbers were significantly back on the week earlier, but R4L steers were still down 2p to 359.2p/kg. In addition, while the number of heifers estimated to have been marketed fell around 700 head, at 358.6p/kg, R4L heifers were also back another 3p week on week. In contrast, young bull numbers were up around 200 head on the week, and at 338.3p/kg, those graded R3 were also back 3p on the week earlier. It is worth noting that, while prices have come back over the past couple of weeks they do still remain notably ahead of the five-year average for this time of the year.

Looking ahead, with such a fine balance in the trade and the expectations that cattle supplies are set to tighten, the balance in the trade could revert quickly to one more favourable for producers. However, on the flip side, with the holiday season in full swing the demand for roasting cuts is unlikely to feel any stimulus. Consequently, it is possible that caution amongst processors could persist, at least in the short term.

Cow prices came back again. At 11,200 numbers were up 1,200 head on the week earlier and again significantly higher on the year. Over the past six weeks over 10,000 more cows are estimated to have come forward, tipping the balance between supply and demand at a time when exports are problematic as a result of the sterling/euro relationship. Overall, cows averaged 216.5p/kg in the latest week, back 8p on the week earlier and a significant 24p over the past four weeks. This means, prices have fallen to be below year earlier levels, which marks a turnaround for the trade of late, having spent much of the summer so far up on the year earlier.

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