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AHDB Pig Market Weekly


12 March 2012

AHDB UK Market Survey - 9 March 2012AHDB UK Market Survey - 9 March 2012

The total number of cattle on UK holdings fell two per cent to 9.7 million head, driven by a decline in all four regions of the UK, although the decline recorded in Northern Ireland was marginal.

AHDB

UK sheep flock expands as cattle and pig herds contract

The survey results indicated a decline in the number of dairy and beef cattle as well as fewer pigs on UK holdings as these sectors struggle with profitability.


At 22.0 million head the UK sheep flock increased by three per cent year on year. This was driven by increased numbers in England, Wales and Northern Ireland while numbers in Scotland declined. The breeding component of the flock rose two and a half per cent to total 14.2 million head. This growth is likely to be as a result of increased retentions of ewe lambs following increased adult sheep slaughter in 2011. Rebuilding intentions reflect the renewed optimism within the industry created by improved prices for finished, store and breeding animals over the previous 12 to 24 months.

The survey also reported increased lamb numbers with the number of other sheep and lambs recording a four per cent increase to 7.7 million head. This represented a modest growth in the flock although it still remains well below the level prior to FMD in 2001.

The total number of cattle on UK holdings fell two per cent to 9.7 million head, driven by a decline in all four regions of the UK, although the decline recorded in Northern Ireland was marginal. Numbers in almost all categories of cattle fell year on year with the number of male cattle down three per cent to 2.6 million head. The number of female cattle was two per cent lower at 7.1 million head.

The breeding component of both the dairy and beef herds declined, with suckler cow numbers down one per cent at 1.6 million head and dairy cow numbers two and a half per cent lower at 1.8 million head. This decline has been driven by much higher culling rates in 2011 as a result of the record prices on offer for cull cows due to the shortage of manufacturing beef globally. The short term outlook remains bleak for any rebuilding of the herds with the number of females between one and two years old down two per cent for beef and up only one per cent for dairy. This indicates that there are not sufficient heifers in the herd to rebuild breeding numbers.

The number of females under one year of age recorded a one per cent increase on the year, however, as in 2011, they are likely to be slaughtered for prime beef production than be retained for breeding. Male cattle over two years old were 12 per cent lower at 299,000 head, although this reflects increased cull bull throughputs and shorter finishing periods for steers. Those aged between one and two years were down three per cent to 979,000 head as lower calf registrations in 2010, bought on by increased feed costs and the decline in the breeding herd, impacted numbers. Those under one year of age were down one per cent at 1.34 million head. Recent BCMS figures indicate that there are more males aged less than six months in the cattle population as a result of the increased finished prices and some easing of feed costs encouraging more dairy bull calves to be retained for finishing.

Despite an increase in numbers in Northern Ireland the UK pig herd fell by over one per cent to total 4.3 million head. Pig numbers in the other three regions declined, particularly in Scotland, which recorded a five per cent decline. The UK breeding herd fell one and a half per cent to 499,000 head, driven by a three per cent decline in female breeding pigs to 409,000 head. Producers have looked to improve productivity by introducing younger breeding animals and taking advantage of strong cull prices by slaughtering older stock. The drive for younger more productive animals is reflected by a nine per cent increase in the number of gilts intended for first time breeding.

Reflecting the smaller breeding herd and the quicker, lighter finishing of animals the number of fattening pigs was one per cent lower on the year at 3.8 million head.

Cattle market trends



Prices

Deadweight cattle prices in GB have strengthened throughout February as finished cattle supplies tightened. With Easter approaching there may be further competition for product. Reports suggest that some processors have found it necessary to pay more to secure enough product to fulfill their requirements. In week ended 3 March the overall steer averaged was 338.1p per kg, up six pence per kg over the past four weeks; R4L carcases averaged 345.8p per kg. The overall young bull average strengthened nine pence since early February to reach 316.7p per kg in the latest week, whilst heifers were eight pence dearer over the same period at 339.5p per kg.

The UK market demand for quality cows remains strong, backed by the continued firm demand for cow beef on the Continent. In week ended 3 March the -04L cow price increased over two pence on the week, and 13p over the month, to average 272.1p per kg.

In week ended 7 March prime cattle prices at GB auction markets also remained firm. The average price of steers and heifers both strengthened a penny on the week to 189.9p and 192.4p per kg respectively, while young bulls levelled at 180.6p per kg.

Estimated slaughterings

Estimated GB prime cattle slaughterings in week ended 3 March totalled 34,000 head, seven per cent lower than in the corresponding week a year earlier. The reduced supply of dairy bull calves being reared for production has continued to impact on young bull slaughterings, which in the latest week were 21 per cent down on the year. In the year to date, prime cattle slaughterings are estimated to be eight per cent lower year on year.

Retail price spreads

During February the average farmgate price for beef increased while the average retail price declined. As a result the actual price spread between the producer and the retailer narrowed compared with the month earlier. Producers received, on average 54 per cent of the final retail price during February, one percentage point more than in the month earlier. With farmgate prices increasing to a greater extent than retail prices during the past 12 months the latest figure is four percentage points higher than in February 2011.

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