May 2016 Market Overview

Beef

UK Beefcows

UK Beef Prime cattle prices have eased back slightly over the last month, however it is worth noting prices are trading lower than 5 years ago. This is having an adverse effect on farmers who are struggling to breakeven at farmgate prices. If the cattle production is not paying, famers will simply stop producing beef calves. Prime beef slaughterings are 4% down for the same period as last year.

The beef market has seen increases continue on (VL) forequarter cuts for mince production as demand for burgers increases. Consumption in UK has never been higher with burger sales in the last year increasing to 47,349 tonnes. Round cuts (topside/silverside) have remained static, with the pressure on prices increases starting to impact steak cuts with rumps and fillets hit hardest. Feather blades and brisket still represent great value for money for consideration when writing menus.

Imported Beef Market Snapshot

A bleak outlook in terms of the overall picture.

• Argentina beef prices are at an all-time high

• Beef production out of Australia is 16% down year on year to date, induced by difficult drought conditions

• Uruguay continues to grow sales in live market beef cattle exports to Turkey

• China will increase imports of beef this year by 200,000 tons year on year this is an increase of over 40%

• Exports of beef from the USA were the lowest levels since 2009 for the year to date

• The Brazilian beef industry (largest exported of beef in the world) is going through a complicated time with volatility of the exchange rate and a strong political crisis.


The currency of the weak £ against the Euro means that exporters of beef do not see the UK as a preferred option. It is worth noting that currency fluctuations have a big effect on the global beef trade. Prices are moving on for all the imported steak meat cuts as we enter into the summer season with sourcing of good imported steak meat proving most challenging.

Lamb

 


UK Lamb Market Snapshot

 

Spring lambs are still very slow coming through with numbers a third behind the same period for last year and prices remaining strong. Traditionally prices come down after Easter however this has not been the case this year. Again the weak £ has had a diverse impact o

 

 

n exports of UK lamb to countries such as France and the Middle East who place a premium price 

on our lamb. With the hogget season drying up and spring lambs late, prices for a very average product are at a premium.

 

Imported Lamb Market Snapshot

lambs


Lamb production in New Zealand for the 2015/16 season will be lower, driven by the reduction and decline of the Lamb crop. The figure is 1.8 million head which is 7% lower than the level of 2014/15. Overall the number of lambs slaughtered this year will fall by 8%, which in turn impacts on exports, thus driving prices up!

 

It is worth noting that exports from New Zealand for lamb were up 13% in the first quarter for this year due to an early spring and good lambing season. This will have an adverse impact on lamb prices at the end of this year with stocks forecast to be tight from NZ for lamb cuts. With the banqueting and Wedding season starting to pick up, lamb rumps and lamb racks are fetching premium prices.

 

 

 

Poultry

After a long period of static pricing in the chicken market, the increase in demand has started to put pressure on for price rises on some key lines. Demand for birds has driven this with the bank holiday closures of production plants, resulting in short supply. Smaller fillets, drumsticks and wings are all moving upwards in price.


Turkey prices remain static with joints, breast strips and escalopes representing excellent value for money.


Pork

pigs

Producers in the UK are still continuing to lose money on each pig produced. The market is one of concern. Prices are at the lowest level since 2008!!!! The cost to produce pigs is at its lowest level since 2010 and producers are still not breaking even. UK pork exports now only count for 3% of total of total EU export volumes. The key drivers for the market being in turmoil are

  • the exchange rate £ v Euro /Dollar
  • consumer price index
  • Crude oil price
  • Seasonality
  • EU pork prices
  • Global food and Cereal prices
  • pig production

Prices for loins remain static with increases for legs starting to come through with demand for hams being the main driver. Bellies are also starting to increase in price with consumers eating more ribs and sausages through seasonality.

Interesting note, Asda from next year will increase its proportion of UK RT pork sold in its stores to 80% which will increase its levels of UK pork in its Stores by 33%. This will have a significant impact on UK pig demand and prices for certain cuts in the future.

 

Download the May Report 2016 as a PDF file