May 2017 Market Overview

Beef

Prime Cattle prices moving up

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The deadweight cattle trade showed an increase for the third consecutive week in week ending 15th April 2017. The GB all prime average gained 1.6p reaching 346.5p / Kg. The price is now 33p/Kg more than the equivalent week in 2016. Prices have risen in England, Scotland and Wales.

Taking the overall GB averages, all categories of prime cattle showed similar increases of 1.7 - 1.8p per kg last week. For steers meeting R4L spec the price rise amounted to 2p to reach 358.5p although for heifers with the same spec the price rise was only 0.5p. In spite of the smaller increase last week compared with the previous one the GB young bull price at 323.0p per kg was at its highest since the first week in January. Yet the R3 price last week was still down 1.3p on the previous week at 336.1p. The cow trade eased back last week after four consecutive weeks of rising prices with the GB average down 2.1p to 227.2p with a 7.7p decline in Scotland contributing to this fall. Cow slaughtering’s also fell last week. Yet for cows classified as –O4L, prices moved up further by over 2p on the week in GB reaching 259.1 p/kg suggesting on going firm demand for those with ideal specs.

Demand for manufacturing beef remains steady including on the continent with EU cow prices continuing to move up. Throughputs were down however due to the Easter break. Demand for fresh Beef continues to hold up well with a good balance to the market. Volume purchases for Beef are up by 3% compared to 2016. In March, prime cattle slaughtering’s decreased once again on the year by 5%, to 160,900 head, according to latest figures from Defra. This was despite the extra working day this year, due to the early Easter in 2016. The majority of the reduction was driven by a 6% (3,800 head) decline in heifer throughputs, which stood at 60,000 head. Steer slaughtering’s also fell by 4% (3,200 head) to 86,400 head, while young bull throughputs declined by 6% (900 head) to 14,600 head. Calf slaughtering’s also declined in March by 11% (1,800 head) to 15,200 head.

Lamb

Liveweight Lamb trade lifts after Easter

Live weight old season lamb prices have increased in the past week as numbers have fallen back after the Easter weekend. In the week ended 19 April 2017, the GB OSL SQQ was 185.9p/kg, an increase of 6p compared to the previous week. Prices remain 4p above the corresponding week in 2016, however the later onset of Easter this year has boosted trade. The total number of lambs coming though GB auction markets were down 26% on the week, as expected with the Easter weekend. Following the bank holiday weekend, prices have lifted, with the GB OSL SQQ on Wednesday 19 April standing at 184.6p/kg. While live weight prices recorded an increase, the deadweight market took a diverging turn, with prices falling 5p on the previous week. In the week ended 15 April, the GB OSL SQQ stood at 412.0p/kg, narrowing the gap to only 2p behind the prices for this time last year. As expected with the bank holiday, estimated slaughtering’s were down by 18% on the week earlier, as many processors reduced their kill days. However, compared to the corresponding week a year earlier, estimated throughputs recorded an increase of 17%,predominantly due to the lead up to Easter.

Australia Lamb

Record prices for Australian Lamb look set to continue throughout 2017. MLA released their quarterly update of 2017 sheep and Lamb forecasts last week, all of which is not good news for abattoirs seeking throughput to minimise costs with a number of abattoirs having already closed or signalling production cuts in the wake of continued high livestock prices and reduced throughput. Lamb slaughter is expected to continue to contract further this year, revised down to further 500,000 head from original predictions to 21.5 million head for 2017 which is 1.5 million on 2016. Lamb production is expected to fall 6% year on year in 2017. Similar to Lamb slaughter, mutton processing is expected to contract further year on year with a 1.2 million head reduction to 5.8 million head for 2017. This all adds up to a downward revision for export forecasts with an expected drop of 7% in Lamb shipments.

Pork & Bacon

Pig prices UK


The UK- spec SPP continued to rise in week ending 15 April to 152.77p/kg, a week on week increase of 1.08p. Compared to the same week in 2016, the current quote is now over 41.5p higher. It has been the story for the past few weeks that tight supplies have been supporting prices and this remains the case. Likewise, anecdotal evidence suggests that the strong demand for UK pig meat is coming more from the export market, rather than domestically which is relatively subdued at the moment.
Estimated throughputs in week ending 15 April fell by 11% on the week and 20% on the year at 147,600 head. It is worth noting however, that there was one less working day in the week due to the Easter bank holiday, and this would have contributed to some of the fall in throughputs. However, slaughtering’s were still lower, by 9%, than in the Easter holiday week last year. Average carcase weights also continued to fall in week ending 15 April. At 84.83kg the current weight is 200g lower on the previous week. The average probe measurement fell again last week to 10.8mm the lowest level since March 2014.
In the week ending 8 April the UK - spec APP continued to rise, reaching the highest price for this series since October 2014. At 154.33p/kg the current quote is 1.34p up on the week and nearly 40p higher than the equivalent week in 2016. The gap between the APP and the SPP remains relatively stable at 2.64p/kg.K Poultry – Poultry and Poultry Meat statistics (Defra for March 2017 compared to March 2016)


UK Poultry – Poultry and Poultry Meat statistics (Defra for March 2017 compared to March 2016)

UK commercial layer chick placing’s were up by 12% to 3.1 million Chicks
UK Broiler Chick placing’s were up by 9.3% at 82.7 million chicks
Turkey Chick placing’s were down by 5.5% at 0.8 million chicks
Turkey slaughtering’s were up by 38% at 1 million birds
UK broiler slaughtering’s were up by 3% at 76.3 million birds
Total UK poultry meat production was up by 7.2% at 137 thousand tonnes

Poultry

Wheat prices have been moving higher during April while Soya has gone in the other direction. The two have basically cancelled out in finished ration costs with the basic layers Ration easing back just £2.00 per tonne during April. UK average wheat feed gained £4.00 per tonne during March hitting £149.00 per tonne.

Avian Flu

The H5N8 virus still remains a threat to poultry and kept birds across the UK and keepers must still comply with strict prevention measures. However as from April 13th 2017 the Prevention Zone rules have changed which means all Poultry in England are now allowed outside as keepers are no longer required to house them or have total range netting in place.
The Euro has remained steady against the £ has remained relatively flat as it started and finished March around €1.165. There are signs of the £ strengthening against the Euro but it's anybody's guess as to whether it is the £ strengthening or the € weakening.

Currency

The pound strengthened recently against the Euro on the back of the announcement by the government of an earlier than expected general election called for June 8th 2017. From its low in mid - March of 1.13 it has climbed to 1.18 (April 26th 2017). While the future of Sterling against the Euro remains uncertain, especially with the looming French election, further advances may be made if as predicted, the Conservatives win the UK election with a massive majority.

Download the May Report 2017 as a PDF file