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QMS (Quality Meat Scotland)


31 January 2012

QMS Cattle Market Report - January 2012QMS Cattle Market Report - January 2012

Having reached their 2011 peak of 349p/kg dwt as December commenced, deadweight cattle prices eased back over the course of the month and have continued to slide since the turn of the year.
QMS - Quality Meat Scotland

Cattle Prices and Supplies

With the festive period over, processor and retail demand has decreased and prices have subsequently fallen. Nonetheless, at 342p/kg steers and heifers remain 16% more expensive than one year ago. January has also seen auction prices slip back.

By contrast, prices for cull cattle have recovered in January having drifted lower towards the year-end. They now stand at a four-month high.

It is clear that one of the contributing factors to the steady appreciation in cattle prices as 2011 progressed was the tightening of supplies. Whereas in the first half of the year (H1) 5% more prime cattle were handled by UK abattoirs, H2 volumes trailed year earlier levels by 6%. Though more heifers and marginally more steers were killed in 2011 than in 2010, the young bull kill contracted to such an extent that overall prime cattle supplies declined 1% on the year. The picture in Scotland was very similar.

In contrast to a lower prime kill, cull cow slaughter numbers for the UK rose by 14% over 2010 levels. However, as the year-end approached there was a slowdown in the culling of mature animals, with November volumes trailing year earlier levels and weekly throughputs in December only slightly higher than a year ago. This, coupled with fewer retentions of heifers on both sides of the border, indicates a future contraction of the UK cattle herd.

Supplies of beef in Irish abattoirs were even tighter throughout 2011 with only April and October showing higher monthly kill figures than in 2010. Consequently, Irish slaughterings during 2011 fell 4.5% year-on-year.

Cattle prices have continued to increase across the EU. Prices have been driven higher by tightening supplies across the EU into the early weeks of 2012 having risen markedly in the final quarter of last year. However, prices have stabilised when quoted in Sterling terms due to exchange rate movements.

Though tighter European supplies have generated opportunities for UK exporters, provisional November trade data indicates that monthly exports fell slightly behind year earlier volumes for the first time since January 2010. Nevertheless, UK exports are still up 35% year-on-year for the January-to-November period.

Shipments to Belgium, France and the Irish Republic continue to surpass 2010 levels. However, trade with the Netherlands eased back while deliveries to Germany and Italy trailed year earlier levels once again. Despite well documented economic turmoil in Europe one country which has been sheltered from a slowdown is Sweden. Though it remains a very small market for UK beef exports, it is particularly positive news that strong growth of shipments has been sustained throughout 2011.

Beef imports were little different in November from the same month one year before and total deliveries in the year-to-date remained 1.5% lower year-on-year. During November, monthly imports of frozen beef were higher than a year earlier for only the second time in 2011. This extra frozen beef came from Ireland.


January 2012

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