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QMS (Quality Meat Scotland)

05 March 2012

QMS Cattle Market Report - February 2012QMS Cattle Market Report - February 2012

Prime cattle prices have rebounded during February after easing back during the previous two months.
QMS - Quality Meat Scotland

Cattle Prices and Supplies

In the third week of the month deadweight steers were at a two-month peak of 348p/kg. With demand easing at the retail level due to the rising cost of beef, upwards movement in producer prices has been driven by a significant tightening of supply. Auction prices have shown more volatility than deadweight values, and despite picking up in February they are 4% below their 2011 peak.

Cull cattle prices have moved sharply higher in the opening weeks of 2012. Again a tightening of supply appears to have been the cause; cull cow auction market volumes were down 13% year-on-year in the first six weeks of 2012.

UK abattoir slaughter data for January shows that the slowdown in throughputs evident throughout the second half of 2011 (H2) continued into this year as 12% fewer prime cattle were slaughtered than in January 2011. However, the way the New Year holiday fell led to the reporting period for January 2012 losing at least one day’s kill. Therefore, a better indication of the way throughputs are trending is given by a comparison between weekly kill figures for December and January. On the year average weekly prime cattle throughputs are down 8%. Steer and heifer slaughterings were 6% lower while young bull volumes fell 21%.

In Scotland, average December and January weekly throughputs were also down 8% year-on-year. Steers fell by 7%, heifers by 5.5% and young bulls by one-third.

Average weekly cull cow slaughter numbers trailed year earlier levels by around 4% at the UK level. However, in Scotland marginally more mature stock was culled over the two-month period than a year earlier. This contrasts with the significant decrease indicated by auction market volumes.

Supplies of cattle into Irish abattoirs have contracted sharply compared with the first seven weeks of 2011. Weekly data indicates that slaughterings have fallen by approximately one-third.

Farmgate prices for prime cattle across the EU have, on average, held firm through the first two months of the year. Values have fallen back 3% in Ireland but risen 2% in France and Germany. Falling Irish prices imply a large decrease in demand given that supplies have tightened significantly.

Provisional calendar year trade data shows that the UK exported 34% more beef in 2011 than in 2010. Delivered volumes rose 36,300t on the previous year to reach 142,500t. Volumes have been steadily increasing since the EU ban on British beef ended in 2006. Nevertheless, 2011 exports were only just over half of 1995 levels; the year before the BSE-induced moratorium commenced.

Of the UK’s principal export markets shipments to Belgium, France and Ireland all increased at a similar proportion to overall exports, while a higher growth rate was seen in shipments to the Netherlands. However, exports to Italy and Germany disappointed; down a respective 9% and 26% year-on-year. Of the UK’s smaller EU customers, Spain and Sweden bought significantly more beef than in the previous year. Growth of 70% in exports to Spain may prove difficult to sustain due to the country’s well documented economic problems. On the other hand, the doubling of exports to Sweden is a promising development given that its economy continued to grow strongly in 2011. This offers the prospect of further inroads being made into the Swedish market in 2012.

Beef imports fell marginally in 2011, down 3,500t on the year to 234,700t. The balance of deliveries changed from 2010 as a 2,200t increase in fresh deliveries was more than offset by a 5,500t decline in frozen product. This rebalancing followed the higher culling of mature stock in 2011 which reduced UK requirements for imports of frozen beef from Ireland for manufacturing.

March 2012

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