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Beef Overview

All roasting joints and stewing meat (diced beef etc.) have increased in value due to the seasonal demand. Prime meat is in high Beefdemand with the lower numbers coming through the markets over the last couple of month. There are indications that the price of cattle will rise due to the price rise of feed. This has been mainly driven due to the extended period of hot weather this summer which has caused a lack of natural feed meaning farmers have had to use up any feed put aside for winter.

Cow prices are dropping but there is a high number of poor quality carcasses coming to market due to the heat through summer when there was lack of natural feed causing a poor consistency on quality.

Imported steak meat is still a more viable option from a consistency, availability and price point of view, and the quality is equally as good as the UK.

Fewer prime cattle slaughtered in September

During September, according to the latest data from Defra, total beef and veal production was down slightly, by 1.1% (-800 tonnes) compared to the previous year, to a total of 73,500 tonnes. Despite this, production in the year to September is still 11,200 tonnes (+1.7%) more than in the previous year, a total of 678,600 tonnes.

The decrease in production during September has been driven by lower prime cattle slaughtering.

Prime cattle slaughter for September is down by 4,200 head (-2.6%) compared to 2017. This is a result of 5,300 head fewer (-6.1%) steer slaughterings during the period. The declines have been offset somewhat by an increase in heifer slaughterings for the month, up 1,500 head (+2.5%) on the year. Increased heifer slaughterings have been a trend for much of the year and cumulatively there have been almost 20,000 more heifers slaughtered in 2018 when compared to last year. This is somewhat surprising considering the elevated level of cull cow slaughterings, but could be indicative of producers exiting the sector, or at least downsizing, possibly even as a risk management strategy in response to uncertainty surrounding Brexit.

As mentioned, cow slaughtering are particularly high this year, and remained higher in September. During the month, cow slaughterings totalled 56,800 head, 4% higher than in September 2017. The 12 month rolling total cattle slaughter is now over 675,000 head, the highest rolling total since the over thirty month scheme was abolished in November 2005

Cow prices continue to decline

During the week ending 20 October the GB all prime average slipped by almost 2p, to 364.28p/kg. Despite this decline, the measure continues to trend above the five year average and is around 4p higher than the same week last year. Prime cattle prices do typically face some seasonal pressure at this time of year as farmers begin to prepare for housing cattle for winter. Estimated prime cattle slaughtering for the week totaled 34,300 head, a similar number to in the previous week, and 5% (1,600 head) up year-on-year.

During the week the heifer and steer overall prices both recorded declines of 2p and 2.4p respectively. In contrast, the R4L specification prices recorded declined nearer to around half a penny. Industry reports suggest some processors are increasing the deductions for cattle which are outside of their preferred carcass specification.

For the third consecutive week, the overall cow price recorded a significant decline (-3.8p) and now stands at 219.8p/kg. For cows meeting the –O4L specification, prices recorded a similar trend slipping to 247.9p/kg. These declines have come about despite reported increases in export orders. Estimated slaughterings for the week totalled 13,400 head, an 11% (1,400 head) increase on year earlier levels.

Lamb Overview 

UK Lamb prices overall continue to decrease. Retail plants and exporting is the preferred destination from produce

rs. The middles of lamb (racks and cannons) are still being exported for a premium throughout Europe and Asia. Overall the Lamb price has remained firmer than previous years and will continue to do so due to the premium prices producers can get by exporting various cuts.

NZ Lamb figures predict similar numbers available over the next year for exporting. Prices look like they will be high similar to last year due to better currency exchange rates and more profitable markets (China etc.)

New Zealand beef and lamb

The new season outlook for New Zealand beef and lamb production forecasts no change in lamb exports in the 2018/19 season, remaining above $3 billion for the second season, while beef exports are set to decline.

Sluggish lamb demand keeps prices down despite reduced throughputs

During the week ending 24 October, the GB NSL live weight SQQ dropped by over 3p week-on-week, to average 164.26p/kg. The price rose marginally at this time last year and so the price is currently 2.75p below the same week in 2017. The price at the moment is quite typical for the time of year with the last three years all being within 7p of the five year average. Industry reports lately have alluded to lambs going through the finished ring that would perhaps be better suited as stores, which could mean that the price received by some producers varies away from the national average by more than usual.

Auction market throughputs are down 7% on the week to 96,000 head. Meanwhile, throughputs for deadweight marketing have also fallen away, down 5% (-12,700 head) week-on-week to total 265,500 head. Both avenues to market are considerably down in numbers compared to the previous year, which is a reflection of lackluster demand for lamb at the moment.

In the week ended 20 October, the GB NSL SQQ deadweight quote declined by half a penny to average the week at 388.9p/kg. This is above both the 5 year average (+17.8p) and last year’s price (+2.5p).

Under finished lambs potentially weighing on market

For the past few weeks throughputs have been gently rising. Lambs have been slower to finish this year, and now some farmers are thinking about reducing numbers as winter approaches. The current mixed weather may also be making some nervous that “true” winter will shortly set in. Industry reports have suggested some of the lambs coming forwards are still too lean and are unfinished, making them difficult to place.

Pork Overview

Prices are softening, yet the market is unstable due the swine fever in Europe and throughout China. This could seriously impact availability and the price going forward. UK Pork prices have dropped but indications are that they will rise due to an 8% price rise in piglets due to reduced fertility in pigs brought on by the heat experience this year and pressure from the export market. The export market is still the preferred destination due to the value of the pound and more profitable markets.

Pig Prices (EU Spec)

During the week ending 20 October, the EU-spec SPP fell for the 14th consecutive week, declining 0.93p. This is the biggest weekly fall during the 14 week period and the price now averages 145.37p/kg, 11.70p below the same week last year.

GB estimated slaughterings for the week totalled 173,300 head, 10,600 head down on the previous week and around 1.5% (-2,700 head) below the same week last year. Industry reports suggest that some factories are having trouble with reliability and that throughput capacity is up and down as a result. This could explain some of the fluctuation in estimated slaughterings recorded recently. The average carcass weight for the SPP sample was 84.32kg. This is an increase of 680g compared to the previous week but 410g lighter than the same week last year.

The EU-spec APP also declined slightly in the week ending 13 October, down 0.62p to finish the week on 149.39p/kg. This is 11.63p below year earlier levels. The gap between the APP and the SPP in the corresponding week measures 3.09p, which is slightly narrower than the previous week and actually the smallest difference since August.

Pig Prices (UK Spec)

During the week ending 20 October, the UK-spec SPP fell for the 15th consecutive week, declining 0.91p. PigsInFieldThis is the biggest weekly fall during the 15 week period and the price now averages 142.77p/kg, 11.49p below the same week last year.

GB estimated slaughterings for the week totaled 173,300 head, 10,600 head down on the previous week and around 1.5% (-2,700 head) below the same week last year. Industry reports suggest that some factories are having trouble with reliability and that throughput capacity is up and down as a result. This could explain some of the fluctuation in estimated slaughtering’s recorded recently. The average carcass weight for the SPP sample was 85.85kg, 690g up on the previous week.

The UK-spec APP also declined slightly in the week ending 13 October, down 0.62p to finish the week on 146.72p/kg. This is 11.43p below year earlier levels. The gap between the APP and the SPP in the corresponding week measures 3.04p, which is slightly narrower than the previous week and actually the smallest difference since August.

African swine flu is causing alarm in China—and beyond

As China’s agriculture authorities scramble to contain the spread of a pig-killing virus, experts worry that it could spread elsewhere in Asia. But the consequences of the disease at home are bad enough. Pork is China’s favourite meat. Pig farming is big business. The collapse of its market would hamper economic growth. Badly handled, the outbreak could dent the government’s credibility.

The disease was first reported on 3 August, when it was noted that 47 out of 383 pigs on a small farm in Liaoning, a province in the far north-east, had died. The virus has spread to five other provinces: Anhui, Henan, Heilongjiang, Jiangsu and Zhejiang. The authorities have stepped up inspections, shut some live markets, stopped the transport of pigs from the affected areas and culled nearly 40,000 swine. On 5 September the UN’s Food and Agriculture Organisation (FAO) held an emergency meeting of regional animal-health experts in Bangkok. The rapid onset of the disease in China and its spread to places 1,000 km apart mean it could easily jump across China’s borders, says the FAO.

This time the pig fever is stoking fears of inflation. The cost of pork has an inordinate effect on the consumer-price index. With a fifth of the world’s population, China consumes half its pork. The government has set up a strategic pork reserve to keep the price stable. The blue-ear pig-disease episode of 2007 provoked a rise of 87% in pork prices and one of the biggest leaps in inflation for nearly two decades.

The disease is transmitted by ticks and direct contact between animals, and can also travel via contaminated food, animal feed and people moving from one place to another, there is no vaccine for this, but it is not harmful to humans.

African swine fever reaches Western Europe in blow to EU pork exports

Two cases of African swine fever have been identified in wild boars in Belgium – sparking fears of a ban on exports to non-EU countries which would come as a crippling blow to the pork industry.

The news has also prompting neighbouring France to call for measures to prevent the disease spreading further, Germany – the EU’s largest exporter of pork has sent experts to eastern Europe to advise on how best to stop its spread.

Denmark – another country closely associated with the pork industry – has even announced plans for a fence along its border with Germany to keep the virus out.

The disease has been present in Eastern Europe for several years – but this is the first time it has been identified in the west of the continent, in this instance in Wallonia near the French border.

There is no vaccination or cure, and when it was discovered at Europe’s second-largest farm in Romania at the end of last month, authorities culled about 140,000 pigs

Poultry overview

Chicken prices have remained stable. The EU Brazilian Poultry ban is still in place. UK produce prices have stabilised as the summer comes to an end and as seasonal demand softens European Chicken is more readily available easing the pressure on the UK market.

However we would expect to see an increase in demand during November/December which will strengthen the price.

We have found that Chicken is becoming more popular during November/December, especially with the Christmas trade. It is more commonly being used at Christmas parties and it is proving to be an easier more cost efficient option than turkey.

Feed market update – October 2018

AHDB usage data revealed that the amount of cereals used to produce GB animal feed in August 2018 increased to an all-time high for the month, reflecting the record amount of compound and integrated poultry unit (IPU) feed produced in August 2018. Ruminant demand for compound feed is also up 15% on the year, likely reflecting forage production issues this season

Turkey overview

All indications are that turkey availability this year is going to be tighter than previous years. Prices will be affected. UK turkey is going to be very short, indications are that birds are going to be on the small side due to all processors changing to chicken during summer to capitalise on the Brazilian poultry ban. Indications are that that demand on UK turkey will outstrip availability with retail getting first option, therefore we would advise that the fresh EU product would be the best option to guarantee consistency and supply.

Looking at the market it is going to be really tight on availability. Our main focus will be to get the volume of product required for our customers, and we will have no option but to pay the highly inflated prices.

Turkey 2018

Customers are urged to pre order as much as possible to ensure availability and continuity of supply. We need to make you aware of possible price rises. Turkey prices are expected to be volatile this year, reflecting the wider poultry market. Problems in Brazil, expected increases in feed costs and trade arrangements, and high demand in Europe will all have an impact on poultry prices in the run-up to the festive period. UK turkey is going to be really short. The UK Turkey market currently has the lowest number of Turkey producers we have ever known. There is a real lack of suppliers this year due to previous years not being able to compete with European suppliers on consistency and price.

Any Customer thinking of using UK Turkey we would highly recommend that you reconsider and switch to Fresh EU product to ensure continuity of supply.

Currently the supply has been consistent with demand with EU suppliers producing “just enough” for the demand within the EU and UK but as seasonal demand has increased, availability is getting tight causing the price to increase.

The reasons for this are as follows:

From the 4 major turkey producers in Brazil – 3 of them are now banned to supply to the EU following fraudulent salmonella tests and quality investigations.

Major users in the EU that would normally purchase 1,000’s of tons of frozen Brazil meat switched to EU supply.

This caused a surge in demand and fresh supply being contracted up for the early part of 2018 - the knock on effect of this is that less turkey was put into the freezer for the latter part of 2018 when demand is higher.

There were a few contract opportunities available in August and September but many customers/suppliers chose to sit on the fence rather than commit to supply.

The uncertainty of Brexit, higher prices and historical market trends meant that consumers believed the market price would reduce into September and decisions could be made then. This has not been the case and in fact prices rose during September.

product to EU destinations. July is no different, with volume to the UK up 252% (+381 tonnes) on the year, to total 532 tonnes.

Imports in the year to July are up by 5% to total 160,000 tonnes. Irish imports in the year to date are up by 6% to total 112,300 tonnes. Brazilian imports in the year to date are up 130% to total 2,000 tonnes. However, it is worth noting that despite the year-on-year increase, imports from Brazil in the year to July are still below 2016 levels

First Irish Beef Container Reached China

This will have an impact on UK importing beef from Ireland. Ireland currently makes up 67% of UK Beef Imports. China is a more valuable market for the Irish exporters and will be their preferred destination, meaning we may potentially have to compete to get produce which would certainly have price implications. China is the largest beef importer globally with imports predicted to increase to 2 million tonnes per year by 2020 with long term demand predicted to steadily rise. Beef imports alone are predicted to increase 11% in 2018. It is expected that Chinese domestic production in the future should grow due to increased dairy production, but this will do little to offset the long-term forecast growth in demand. China remains the main focus of attention for nearly every exporting country and has become one of the few stable markets.

Lamb Overview

Lamb prices overall have decreased. Retail plants and exporting is the preferred destination from producers. The middles of lamb (racks and cannons) are still being exported for a premium throughout Europe and Asia. However overall the Lamb price has remained firmer than previous years and will continue to do so due to the premium prices producers can get by exporting

New Zealand beef and lamb outlook published

The new season outlook for New Zealand beef and lamb production forecasts no change in lamb exports in the 2018/19 season, remaining above $3 billion for the second season, while beef exports are set to decline.

Sheep numbers at 30 June amounted to 27.3 million head; down just under 1% year-on-year. Figures were a result of fewer breeding ewes in all regions driven by strong prices for cull ewes, but moderated by a lift in hogget numbers.

Beef cattle numbers at 30 June totalled 3.68 million head; a near 2% increase on year earlier levels, predominantly driven by an increase in weaner cattle held back in response to high prices of replacement stock. Meanwhile, dairy cattle numbers lifted slightly on the year to 6.6 million head.

The estimated volume of lamb meat exports in 2018/19 is projected to decrease by almost 2% due to decreased availability of lambs for export, however, this will be partly offset by a slight (0.5%) rise in average carcass weight. Total mutton exports are expected to see a large (15%) decline to $466 million, due to a large decline in volume. This fall is despite the projected 3.2% increased on the record 2017/2018 price of 417 cents per kg.

Beef and veal exports are expected to decline by over 3% to 415,000 tonnes, due to a predicted decline in the number of cattle processed for export to 2.51 million head. The value of shipments are also expected to decrease almost 3%, despite the more favourable exchange rate.

Mixed Bag for Sheep prices this week

Store lamb prices at auction markets in England and Wales typically record gentle downwards movement at this time of year.

This year has been no exception, although prices did receive a small amount of support this week. During the week ending 22 September, the price averaged at £54.40/head, up £0.41 week-on-week.

GB finished live weight trade remained stable during the week ending 26 September, with the NSL SQQ at 170.97p/kg, just 0.37p up week-on-week. Currently the quote stands 8.35p above year earlier levels, and up almost 11p on the five year average.

Auction market throughputs for the week picked up somewhat (+11% week-on-week) but remained below typical levels for this time of year, at 98,800 head.

Pork Overview

EU prices softened but the market is unstable and prices are expected to rise due to the feed costs and the swine fever throughout Europe. UK Pork prices will rise due to an 8% price rise in piglets due to reduced fertility in pigs due to the heat experience this year and pressure from the export market. The export market is still the preferred destination due to the value of the pound and more profitable markets.

Pig Prices (EU Spec)

During the week ended 22 September pig prices continued to track down as they have been in recent weeks. The EU spec SPP fell by 0.09p, to 147.68p/kg. The price is currently 13.36p below las t year’s price.

GB estimated slaughtering’s were up around 600 head on the previous week to total 172,600 head. Industry reports suggest that supply is slightly ahead of demand, which remains subdued. The average carcass weight for the SPP sample for the week remained steady at 82.89kg.

In contrast to the SPP, the EU-spec APP rose slightly on the week, up 0.16p in the week ended 15 September, to finish on 151.74p/kg. The current figure is 13.99p lower than year earlier levels. The current price rise has widened the gap to the SPP, now measuring a 3.97p difference between the two prices

Belgian authorities have confirmed African Swine Fever (ASF) in its pig population.

The Federal Agency for the Safety of the Food Chain (FASFC) confirmed that the outbreak took place in Etalle, 10 miles from the French border. According to an OIE report, four wild boar were found to be carrying the disease. Three of the animals were already dead when found, while the fourth was destroyed.

The FSASC said: “Samples were taken directly and sent to Sciensano [the national laboratory] who confirmed that wild boars carry the virus responsible for ASF. Wildlife control and prevention measures within pig farms are now being implemented at the regional and federal levels, respectively, in a high-performance collaborative framework. Biosecurity in pig farms is essential and the FASFC ensures that it is permanently properly insured.”

The source of the outbreak is not yet known but control measures including zoning, added surveillance and official disposal of the animals, by-products and waste have been applied.

The agency added: “The situation is taken very seriously by the various authorities and levels of power in Belgium and the measures are carefully put in place and monitored, given the potential impact for the livestock and hunting sectors. A national task force was set up in early 2018 in this context. The different levels of power will continue to work closely together to maximize the effectiveness of prevention and control measures.”

Pig Prices (EU Spec)

Heatwaves Lead to 8% rise in Piglet Prices. With dry spells lasting more than 80 days in some parts of the country this summer, the heat has reduced the fertility of pigs and red meat prices are set to rise in the long run.

Conditions of weather is something that farmers are well accustomed to, however the extreme weather seen this year has put particular stress on farming costs and yields. Also affected is the price of feed which is set to rise as due to the extreme weather there has been a weak harvest (Meat Management September 2018)

Pig Prices (UK Spec)

During the week ended 22 September pig prices continued to track down as they have been in recent weeks. The UK spec SPP fell by 0.08p, to 145.04p/kg. The price is currently 13.12p below last year’s price.

GB estimated slaughtering’s were up around 600 head on the previous week to total 172,600 head. Industry reports suggest that supply is slightly ahead of demand, which remains subdued. The average carcass weight was 84.39kg.

In contrast to the SPP, the UK-spec APP rose slightly on the week, up 0.16p in the week ended 15 September, to finish on 149.04p/kg. The current figure is 13.72p lower than year earlier levels. The current price rise has widened the gap to the SPP, now measuring a 3.92p difference between the two prices.

Poultry overview

Chicken prices have now stabilised The EU Brazilian Poultry ban is still in place. UK produce prices have stabilised as the summer comes to an end.

Turkey 2018

The supply has been consistent with demand with EU suppliers producing “just enough” for the demand within the EU and UK but as seasonal demand has increased, availability is getting tight, causing the price to increase.

This month the price has already increased by 20%.

The reasons for this are as follows:

Of the 4 major turkey producers in Brazil, 3 of them are now banned to supply to the EU following fraudulent salmonella tests and quality investigations.

Major users in the EU that would purchase 1,000’s of tons of frozen Brazil meat switched to EU supply.

This caused a surge in demand and fresh supply being contracted up for the early part of 2018. The knock on effect of this is that less turkey was put into the freezer for the latter part of 2018 when demand is higher.

There were a few contract opportunities available in August and September but many customers/suppliers chose to sit on the fence rather than commit to supply.

The uncertainty of Brexit, higher prices and historical market trends meant that consumers believed the market price would reduce into September and decisions could be made then. This has not been the case.

The increase in business enquiries in September has pushed up the price with just enough turkey in the market to fulfil normal demand but no extra for any increased supply. Turkey is becoming increasing short in the market place.

We anticipate prices increasing throughout September/October, stabilising through November with another increase in December.

Download the November Report 2018 as a PDF file

Beef Overview Prime cattle prices steady on higher kill

In the week ending 26 January, overall deadweight cattle prices rose slightly, and have shown some stability over the last few weeks. This week’s price move was due to a rise in prices for plainer types, with cattle meeting R4L and R3 specifications more likely to have lost ground.

The GB deadweight all-prime average rose by 0.6p to settle at 350.0p/kg. The measure now stands around 8p below year-earlier levels. Estimated prime cattle slaughter picked up cows fieldsto 35,400 head, after stabilising last week. This throughput was 700 higher than last week and 4000 head higher than the same week last year. Combined with the positive move for prices, this implies slightly stronger beef demand.

Overall steer prices rose by 1.2p to 351.7p/kg, but those meeting the R4L specification fell fractionally. Heifer prices recorded a similar pattern, but with a more marginal gain overall, and a slightly larger loss for R4L carcases.

Cow prices also showed some strength, rising nearly a penny over the week to average 212.6p/kg. However, this is still over 30p lower than year-earlier levels, when prices were rising more quickly. Cows meeting the –O4L specification recorded a smaller increase of 0.7p, with the average price settling at 230.8p/kg. Estimated cow slaughter stood at 14,000 head, a decline of around 700 head on last week’s throughput but still nearly 20% higher than last year.

Global beef price update

Global beef prices in the year-to-August were up almost 2%, averaging $5,434/tonne, although they have come under pressure in the last couple of months. This is based on volumes and export prices of the world’s three biggest exporters, Brazil, the US and Australia. Together, the total volume of fresh and frozen beef exported from these countries during this period was around 2.3 million tonnes, up 13% on the year. In the year to August, beef prices in Brazil were 4% lower on the year, driven by challenging conditions. Following a large decline in June this year, Brazilian beef exports rebounded strongly in July and August, resulting in an 11% increase in volumes exported in the first eight months of the year. Exports to Brazil’s main export markets, Hong Kong and China, have increased significantly in the eight months to August, up 18% and 44% respectively. Despite ongoing uncertainties surrounding the Brazilian economy following the general election in October, beef exports are likely to continue to grow; in part as a result of Russia recently allowing imports of beef from Brazil to resume, following its closure in December 2017. Australian exports for the year to August were up 14% on the year at 771,314 tonnes, encouraged by strong global trading conditions and elevated slaughter. Increased demand has been led by China, with imports from Australia up 53% year-on-year between January and August.

Brazilian Beef Exports overcome adversity

Brazilian beef production grew substantially in 2018. In the third quarter of 2018 alone, slaughterings stood at 8.3 million head, according to the IBGE. This is an increase of 4% (290,000 head) compared to the same period in the previous year. In the year to-date, production has also increased by 4%, to stand at 23.8 million head. The overall average carcase weight was report at 254.40kg/head, which is marginally heavier (1.5kg) than the same period in the previous year. Interestingly, average bull and heifer carcasses increased by around 3kg year on year. The ratio of male to female slaughterings in Brazil has historically moved in a cyclical nature. The proportion of female slaughterings reached a five year high in Q1 of 2018, at 47%. Since then, the proportion of female slaughter has declined to 39% in Q3 of 2018. Q3 heifer slaughterings themselves have increased significantly year-on-year (22%), while cow slaughterings have remained relatively stable. Bull and steer slaughter in Q3 in 2018 both showed a 3% increase year-on-year, by 125,000 and 10,000 head respectively. Looking ahead, production is forecast to continue expanding in 2019, with the USDA forecasting a 3% increase in production in 2019, to reach 10.2 million tonnes. Brazilian beef imports in 2018 were recorded at 37,000 tonnes, it is the lowest level since 2011 and an 18% decline year-on-year. However in value terms, beef imports increased by 10% on the year. The majority of the volume decline has come from a fall in imports of fresh or chilled boneless product. Meanwhile, Brazilian beef exports grew significantly during 2018. In value terms, beef exports totalled R$ 23.5 billion (Brazilian real), a 24% increase yearon-year, while volumes increased by 12%, at 1.6 million tonnes. This is particularly impressive considering that export levels ground to a near halt during the truckers strike in June.

Lamb Overview

Prime sheep prices remain 5% higher than a year ago

Comparing the prime sheep kill in the six months from June to December 2018, it shows a decline of 5% on the same period in 2017, which is broadly the same as the size of the fall in the lamb crop reported in the June 2018 UK census. European prices are also showing some firmness, sitting around 2.5% higher than last year. Consequently, the proportion of lambs sold before the turn of the year is broadly the same as last year. The number of hoggs being carried forward into 2019 is 3-4% lower than last year which, in itself, and everything else being equal, will support farmgate prices. Lower lamb throughputs have been accompanied by slightly higher carcase weights, and sheepmeat production has also been affected by changes in ewe slaughtering. There has also been a sizeable increase of 5% in ewe and ram slaughterings, which means that the volume of sheepmeat produced in the UK in the second half of 2018 declined by 3.5%

Sheepskin prices have, however, come under pressure in the second half of 2018 offsetting some of the strength in the meat market. Additionally, the strengthening of sterling in the past week will also, in the short-term, squeeze export competitiveness. Although the second quarter of the year (April to June) is usually the quarter with lowest dependence on exports, they still account for 30% of production.

If this trade is disrupted, or has to face tariff barriers, prices will inevitably come under pressure.

In contrast to the liveweight price, deadweight prices fell once again in the week ending 26 January. The GB SQQ fell away by just over a penny to average the week at 430.4p/kg. It is worth noting however that even though the price is falling slightly, it is still relatively high compared with historic prices. The measure is currently around 15p above the 2018 price and almost 27p higher than the 5 year average. Estimated slaughterings in the week totalled 242,200 head, similar week-on-week but around 3,700 less (-1.5%) than the same week

Imported Lamb Will imports of lamb from New Zealand return to normal in 2019?

For the past two years, UK imports of lamb from New Zealand have tracked below historic normal levels while at the same time the global supply and demand balance has tightened, and global prices have continued to trend significantly above the five year average as we enter 2019. Total volumes of imports of sheep meat into the EU-28 (including UK) from third countries between January and October 2017 declined 14% year-on-year, while the value of these imports remained stable, according to Eurostat. This indicates that the price per tonne was higher. During January to October 2018, import volumes recorded growth of 2%, which meant they remained significantly below typical levels. Looking closer to home, UK imports have been declining consistently in recent years, recording an 11% volume decline year-on-year in 2017, and a further 3% decline in 2018, according to HMRC data. Whether New Zealand shipments to the UK return to a more typical volume this year would be influenced by both availability of product and price. During the first two months (October and November) of the New Zealand lamb production year, production of sheep meat has been stable.

However, Beef & Lamb NZ reports that the New Zealand lamb crop is around 1% smaller year-on-year, and expects around 4% fewer lambs to be slaughtered for export purposes. This could be used as an indicator that New Zealand exports will decline in 2019. However, if total volume declines, by itself this does not mean that less will be shipped into the EU or the UK in particular.

Brexit will inevitably have an effect on UK trade during 2019 and beyond. If UK prices are low, there is the potential that New Zealand exports to the UK will reduce, with at least some product being directed into mainland EU instead. AHDB has done some analysis into this data exploring what potential affect this would have sheep meat volumes available on the market. The price achieved would also be an import consideration for New Zealand exporters, therefore even in this situation it is likely the UK may continue to receive some product, most likely leg joints.

In total during 2017 the EU not including the UK, imported 145,800 tonnes product weight of sheep meat. 71,200 tonnes of this came from the UK and 64,400 tonnes came from New Zealand, according to Eurostat data. In carcase weight equivalent this is 74,000 tonnes and 75,000 tonnes respectively, reflecting that fact that more product from New Zealand is shipped boneless.

Pork Overview

As 2019 gets underway, ‘uncertainty’ created by complex diseases and trade issues is looming for pigmeat. The year will be full of potential for global pork supply, with growth in production and demand in many parts of the world on the cards, however this is overshadowed by rising disease pressures. African swine fever (ASF) stands out as the single biggest challenge facing global pork in 2019. The changes ASF will bring create opportunities for some, and threats for others. Looking at the EU pork market specifically, the report PigsInFieldshows mixed signals entering 2019. While the expected higher imports by China encourage production expansion, Belgium and Eastern Europe are still shrouded in ASF threats. Rising piglet prices in recent months signal tight piglet supply, but also strong production intentions. The report shows that Brexit is another wild card for EU trade, which is expected to play out in Q2 and beyond. Referring back to disease pressures challenging the global market, they are expected to affect global animal protein in two ways. Firstly, severe disease outbreaks can lead to local production losses, especially in cases where there is no cure, no vaccine, or limited vaccine stocks for the disease. This impact can last for some time – in the case of ASF in China, infected zones are prohibited from restocking animals for at least six months. The second area of impact is trade – and this is arguably more significant than production losses. The outbreak of disease brings restrictions on trade from the affected country, in order to manage the risks of the disease spreading. Production is expected to increase similarly, reaching 948,000 tonnes. This maintains the original assumption of a little expansion in breeding sow numbers, driven by the integrated outdoor sector. However, there remains a risk that producers struggling in the current more difficult financial conditions will instead reduce herd numbers.

UK imports were higher than expected towards the end of last year, likely reflecting the competitive prices available at the time and some stockpiling activity in light of Brexit. Without clarity on Brexit, it is difficult to anticipate how imports will develop this year. Nonetheless, higher production levels should deter an increase, but this will depend on the prices on offer.

Exports also picked up strongly in the latter part of 2018, particularly to China. China is expected to continue providing opportunities this year, as its domestic industry struggles with African swine fever. However, again it is difficult to tell how UK exports will fare overall without knowing how the UK will be trading with the EU, which is still the destination for over half of UK pig meat exports.”

As well as the uncertainty surrounding Brexit and herd performance, the potential for further spread of African Swine Fever also risks significant disruption to both the global and UK pig market.

Pig Prices (EU Spec)

For the week ending January 26, the measure was virtually the same as the previous week at 138.71p/kg. The price is still 8.1p below the 2018 level, with industry reports suggesting demand for pork products remains poor. Estimated slaughterings in the same week totalled 183,900 head. Although similar to the previous week, this is over 10,000 head above the equivalent week in 2018. The average carcase weight dropped by 610g on the week to average 85.53kg. This has narrowed the gap to 760g compared to the previous year’s level, which it has been considerably above for a number of weeks. Meanwhile, average probe measurements are now in line with the 2018 level, at 11.3mm. In the week ending January 19, the EU-spec APP fell by 1.28p to average 143.64p/kg. The SPP dropped by less in the same week and as such the gap between the APP and the SPP narrowed again, to 4.86p

Pig Prices (UK Spec)

The UK-spec SPP took a slight respite from downward movement in the most recent week. For the week ending 26 January, the measure was virtually the same as the previous week at 136.24p/kg. The price is still 8p below the 2018 level, with industry reports suggesting demand for pork products remains poor. Estimated slaughterings in the same week totalled 183,900 head. Although similar to the previous week, this is over 10,000 head above the equivalent week in 2018. The average carcase weight dropped by 610g on the week to average 87.08kg. This has narrowed the gap compared to the previous year’s level, which it has been considerably above for a number of weeks. Meanwhile, average probe measurements are now in line with the 2018 level, at 11.3mm. In the week ending 19 January, the UK-spec APP fell by 1.26p to average 141.09p/kg. The SPP narrowed again, to 4.77p

Japan opens market to British beef and lamb

UK exporters are set to benefit from a multimillion pound boost as Japan today opened its market to imports of UK lamb and beef. The agreement, signed during Prime Minister Abe’s visit to the UK, is estimated to be worth a total of £127 million over the first five years of access – approximately £75 million for beef and £52 million for lamb. Japan, a major importer of beef with a growing demand for high quality lamb, has lifted its two-decade long ban on imports of these products with immediate effect. The deal follows a year of global successes for UK exporters, which included China lifting its ban on UK beef, Taiwan opening its market to pork and India preparing to import UK sheep meat.

Farming Minister George Eustice said: “The opening of the Japanese market is an excellent result for beef and lamb producers across the UK and demonstrates confidence in our high standards of food and drink. As we enter a new era as a global exporter, unlocking this market marks a major step for future trading relationships and signals our commitment to supporting our food and drink industry to export more British produce.”

The lifting of the ban follows a series of visits and negotiations between UK and Japanese officials, which culminated in an inspection of UK beef and lamb production systems in 2018, successfully hosted by Defra and the Animal and Plant Health Agency, the Food Standards Agency, Food Standards Scotland, DAERA, the Agriculture and Horticulture Development Board (AHDB) and the UK Export Certification Partnership.

Japan is renowned for its stringent food safety and import controls regime and opening this market is expected to send positive signals to other countries, particularly in Asia, regarding the safety of UK exports.


Poultry overview

British poultry meat farmers and producers are calling on the Government to take action to prevent the UK from leaving the EU with no-deal.

In the absence of even the most basic Government plan to ensure a secure and trusted supply of British food, the British Poultry Council has warned of the consequences of a no-deal Brexit on the affordability and availability of British poultry meat and the sector’s ability to flourish and feed the nation.

A no-deal Brexit would be incredibly damaging for our sector, for our ability to trade, for our workforce and for British consumers of poultry meat.

Almost three quarters of our imports (£2bn/year) and exports (£500m/year) are with the EU – ensuring a continuation of trade with that market is essential.

We are concerned that leaving with no-deal could effectively result in a trade embargo; in the import of products produced to lower standards; and in export tariffs being imposed on poultry meat that goes to the EU (27% increase on chicken).

In the event of a no-deal Brexit, there will be increases in the costs of production which would be reflected in the price of fresh UK chicken. We estimate in the worst case no-deal scenario, the price of breast meat could rise by 25%.

If the Government is serious about making Brexit work, then it must avoid running the risk of creating a two-tier food system where only the affluent can afford to eat British poultry that meets British standards from farm to fork.

Industry News Meat

Meat industry responds to Brexit deal rejection
Following the news that Prime Minister Theresa May’s Brexit deal was rejected in Parliament by 230 votes, the meat industry has voiced its concerns.

We’ve suffered the effects of the concept of Brexit since 2016, and the actuality of leaving will be worse. The only sensible option now is to abandon Brexit as a failed project.

In the British poultry meat sector we’ve suffered a lack of labour and increasing production costs, and seen our country’s food standards being challenged by other nations eyeing a quick profit at our long-term expense.

Brexit and food comes down to a very simple concept. Any departure from the EU means affordability and availability of food will be compromised. The burden of that will fall on those who can least afford it.

A no-deal Brexit could lead to huge disruption as a result of an effective trade embargo on the export of animals and animal products to the EU, leaving many livestock farmers with no market for their produce. At the same time, we know that the Government would choose to unilaterally lower import tariffs on food. Let’s be clear about that, if that happened Britain would be actively encouraging food imports from all over the world potentially produced to food standards lower than is legally allowed by UK farmers.

Brexit Uncertainty No deal challenges across beef and lamb

With the Brexit clock ticking, new insights look into the potential impacts on the UK’s trade in agricultural and horticultural goods.

Brexit prospects for UK agri-food trade examines in detail how both an orderly withdrawal and a no-deal scenario will affect trade across the UK’s main farming sectors and a ‘bite-size’ versions has been produced for beef and lamb. Using the latest data, the full report looks at the current trade situation, potential tariff levels and the size of the domestic production base to reveal a complex picture for UK agriculture and horticulture after Brexit. It provides ready comparisons between sectors in terms of imports and exports, self-sufficiency and tariff levels.

UK exports of agricultural and horticultural products are likely to be rendered uncompetitive if World Trade Organization (WTO) tariffs come into play on our exports to the EU. By plotting the value share of particular food products in imports and exports markets against its ad valorem tariff, the report visualizes which goods would be most affected by the imposition of WTO rules if the UK defaults to no-deal.

In addition, if the Government decides to drop all tariffs on imports from the EU this would have to apply to the rest of the world, meaning UK products could face increased competition on the domestic market. In many sectors, UK costs of production are high when compared with those of key international competitors. No deal could mean the loss of tariff barrier protection and more competition from global producers. The prospect of a no-deal scenario cannot be ignored. This would have a seismic impact on UK trade, with major implications for the farming sectors. Other key findings include:

The sheep meat sector is likely to be the worst hit by a no-deal Brexit. UK exports would suffer considerably if WTO tariffs of up to 50 per cent of the price of meat were put in place – a huge blow to the UK’s competitiveness. In addition, around 90 per cent of UK sheep meat exports are to the EU, meaning no deal is likely to hit sheep farmers’ incomes.

For beef, exports to the EU would also be limited considerably if tariffs, which are sometimes as high as the price of the product itself, came into play. Again, if the UK Government drops tariffs on imports, UK beef could see increased competition, meaning lower prices and returns for farmers.

Download the Feb Report 2019 as a PDF file

  

UK Beef

Cattle trade levels
Cattle trade stabilises amid reports suggesting that the market for both commercial and cattle fitting specific supermarket schemes was finely balanced. Despite numbers seemingly increasing on the week, the all prime deadweight average levelled at 349.4p/kg.  This broad stability continues to reflect a more positive trading environment in which the all prime average has strengthened by more than 20p/kg since the start of August. With throughputs over the period up around 15,000 head, this price rise has evidently come as demand has improved. This means the supply and demand balance has consistently been in producers’ favour, with processors looking to secure adequate supplies of cattle. The situation could be maintained as the peak seasonal buying period approaches.
 
UK Beef & Veal
 
Beef and veal exports perform well again
Beef and veal exports increased 7% on the year to 8,500 tonnes. While higher shipments to the Netherlands and Ireland largely drove this increase, there was a spectacular increase in exports to Hong Kong. Despite this uplift in volume, the value returned to the industry was still lower compared with July last year, down 3% at £29.8 million; the unit price was back 9% on the year at £3,500/tonne.
 
Global Snapshot
·         Uruguay; Average export prices increases top 2011
·         Brazil; September see’s beef exports fall
·         Argentina; See’s lower prices for finished cattle
·         Paraguay; Beef exports up 15% year to date
·         Russia’s; Now threatens to stop imports via Belarus due to EU re-route of exports
·         Europe; Markets remain stable despite Russian embargo
·         China; Displaces Russia as key market for Uruguayan beef
·         Oceania; NZ Lamb production hits seasonal low
 
UK Lamb
 
Prices continue to ease
Lamb prices have continued to ease throughout September, largely as part of the expected seasonal trend for this time of year. This comes as supplies are plentiful and demand remains subdued. This was reflected in the GB NSL SQQ, which fell by 15p since the end of August to 149.7p/kg in week ended 27th September. The largest drop was seen in the first week of the month, week ending 5 September, when the SQQ fell 10p on the week to 154.5p/kg. Following this drop, the week on week declines were less severe with some stabilisation apparent at times.
On the back of more favourable weather conditions, lamb carcases were 2% higher in September, compared with the same month in 2013 at 19.2kg. Adult carcases were also heavier, albeit only by 1%, at 25.8kg. Overall sheep meat production was up 1% on the year at 25,400 tonnes, as the reduced adult sheep kill offset the higher carcase weights and more lambs were being slaughtered. Production in the year to date is now up 3%, or 6,000 tonnes, on the year. 
 
Imported Lamb
 
UK imports see little change
Imports were almost unchanged on the year. At 7,500 tonnes, total import volumes were largely static, being up only 0.3% compared with 2013. However, volumes were very low in 2012 and shipments remain well below historic levels. Bucking the trend that has been evident so far this year, New Zealand shipments were 7% higher year on year. Australia continued to send more product, with shipments 1% higher on the year, meaning that in the year to date, Australia has shipped 34% more product than they did in same period last year. These higher shipments were offset by lower volumes from Ireland, the Netherlands and the Falkland islands. Despite UK imports from New Zealand being higher on the year (although volumes were unchanged overall) this looks like a blip and the volume of New Zealand product on the UK market should still be lower on the year. August shipments from New Zealand to the UK were reportedly down 5% on the year. Given the shipping times from New Zealand, these lower volumes should have started to enter the UK market from early September onwards. As such, current volumes of New Zealand product should be at a low ebb, both seasonally and compared with recent years. Additionally, the average value of these exports is considerably higher than they were a year ago, being 14% more expensive.
 
Price forecasts from Brussels indicate a 3% recovery in the EU heavy lamb price for 2014 as a whole after the small fall in 2013. In January-August this year the price was 4% higher, even though in August it was down 3%, given the lower prices in the UK and Ireland. One factor that is affecting lamb prices this year is the low value of sheep skins on the global market, in response to reduced demand from key importers such as China. In early September, lamb skin prices in Australia were down two thirds compared with a year earlier.
 
Pork
 
UK pig prices
The EU-spec GB SPP fell to 152.35p per kg for the week ended 18 October, down by almost 2p for the second week in a row. Please note that one plant is missing from the SPP sample this week. The normal seasonal increase in finished pig prices is clearly not yet evident and actually, based on comparisons with the DAPP, this is the lowest price since September 2012. Prices remain somewhat volatile as contracts are renegotiated following the end of the DAPP and the true market situation may not be completely clear for another couple of weeks. AHDB/BPEX estimated slaughterings showed a 3% reduction in the week ended 18 October, to 162,100 head. Carcase weights in the latest week edged up to 82.22kg, a marginal increase on the week but the largest weekly average on record. This is reported to be partly a result of more pigs than normal being rolled in recent weeks as supply is outstripping demand.

EU pig prices

The EU-spec GB SPP resumed its downward trend, falling to 153.98p per kg for the week ended 11 October. This was almost 2p below the level a week earlier, with post-DAPP contract changes still adding volatility to the price. Pig growth over the last few months has been positive, meaning heavier pigs at slaughter, and supplies of pigs are generally rising in at the same time, although the slaughter estimate for the latest week was below last year’s level. This increased supply has contributed to finished pig prices remaining sluggish. The record gap between UK and EU prices also continues to have a part to play. The average carcase weight for the week ended 11 October was almost unchanged from the previous week, at 82.04kg. The probe measurement reached 11.5mm, the highest since the start of the year. For the week ended 4 October, the GB APP rose marginally, by 0.30, to 158.44p per kg. During the same week, the SPP also increased slightly, to 155.62p per kg, maintaining a difference of almost 3p between the two price series.
 
Poultry
Did you know – the humble chicken

World Wide
·         50 billion chickens are currently grown each year.
·         Americans now eat 150 times as many chickens as they did 80 years ago
·         When China & India catch with the this consumption level the world will need to double its current volumes to 100 billion  

At Home

       UK – 29 million laying hens
       UK – 116 million broiler chickens
       UK – 750 million chicken slaughtered annually
       UK – 14.42 million chickens per week
       UK – 2.06 million chickens per day
       Chicken represents 46% of all protein consumed by the average person in the UK

       More than 55% of all chicken is sold as Breast, 25% as whole birds & the remaining 20% as Drumsticks / thighs / legs / wings / offal cuts

Download the November/December Report 2014 as a PDF file

 
 

 UK Beef
 
Further gains in prime cattle trade
In week ended 20 September, the deadweight cattle trade moved in a positive direction again, despite reports suggesting that trade is starting to level and overall throughputs being unchanged on the previous week. With the market continuing to benefit from solid processor demand, the GB all prime deadweight average price increased by over 2p on the week to 346.5p/kg. As such, it is edging closer to the £3.50/kg threshold which represents a reasonable target for many producers in the current climate. Despite more steers coming forward compared with the week before, R4L’s strengthened almost 2p to reach 358.2p/kg, their highest position since early May.
 
UK Beef & Veal
The combination of more cattle coming forward and higher carcase weights has resulted in some very significant year-on-year increases in Irish beef and veal production in the first half of 2014. However, at 138,200 head cattle slaughterings in July were up just one per cent, or 1,900 head, compared with July last year. With carcase weights staying higher, beef and veal production still increased by four per cent to 45,700. However, this was the smallest year-on-year uplift in 2014 so far and well behind the double digit increases in the March to June period. With the UK by far the largest destination for Irish beef, reduced availability could in some part have contributed to the stability on the UK market during July.
 
Global Snapshot
·         Uruguay; YTD Slaughter numbers increase to 1.43m head +0.4%
·         Brazil; Finished cattle prices remain firm
·         Argentina; Has warning from EU to abstain on it’s over trade with Russia
·         Russia’s; Ban on EU & US food, sees no substantial change to market values
·         Europe; Markets stable despite Russian embargo
·         USA; July beef exports down 14.6%
·         China; Consumption set to rise a further 15% by 2023
·         Australia; Lamb exports edge higher for 8th consecutive month
 
UK Lamb
Prices stabilise after throughputs fall
Liveweight lamb prices continued to follow a ‘normal’ seasonal pattern and eased on the week. The average GB SQQ for the period was back 5p to average 152.3p/kg. Numbers at GB auction markets were tighter, being back over a quarter on the notably higher throughputs earlier in the month. It is possible that, with the arrival of the breeding sale season, producers’ focus may have switched to marketing breeding sheep. Despite the GB NSL SQQ being down on the week overall, prices did demonstrate stability in some areas. Whilst the majority of auction market daily averages showed a drop in prices. Despite the recent weakening of sterling against the euro it appears that it has not been enough to improve demand on the continent. As the autumn weather arrives and with the approaching festival of Eid el Adha offering some support to prices, it is possible that the downwards pressure of recent weeks could be alleviated to some extent. However, the extent of this will, in the main, depend on consumer demand.
 
Imported Lamb
NZ sheep numbers still falling
New Zealand lamb (and mutton) production is unlikely to materialise, as performance gains should be harder to come by. In the coming 12 months or so, supplies are unlikely to show any real growth as the number of hoggets was down 8% on the year, meaning short term slaughterings should be lower. New Zealand lamb production in the 2014/15 season is likely to see little changed, unless fewer lambs are retained for breeding. If this occurs then the production base will be eroded even further, meaning longer term production will be affected. With Australian production in 2014-2016 expected to show year-on-year declines, the world trade is still likely to experience relatively tightened supplies. This should, broadly speaking, add support to the world market, which should benefit the UK as a key part of the global trade, being the both the third largest importer and exporter.
 
Chinese sheep meat imports continue to surge
Latest import figures from China continue to show that there is little sign of demand for imported sheep meat slowing. Chinese sheep meat imports were up 86 per cent on the year at 31,200 tonnes. However, this increase was purely driven by increased volumes from New Zealand, with shipments increasing three-fold on the year to 21,700 tonnes. The other suppliers, Australia and Uruguay, showed year-on-year declines, falling one per cent and nine per cent respectively. In addition to showing further growth in total volumes, there continues to be signs that the Chinese market is evolving and developing a taste for higher value product. Chinese imports of carcases totalled 6,400 tonnes or nearly 21 per cent of total imports. This compares with only 600 tonnes in the corresponding period of 2013 which amounted to less than four per cent of total imports. In May 2012 there were no shipments of carcases at all.
 
Pork
UK PRICES
The EU-spec DAPP in July averaged 161.50p per kg, down for the second consecutive month and almost 3p lower than June. Having fallen steadily since late May, finished pig prices recorded the lowest monthly average since April last year. In addition to subdued demand in the UK market, price falls in the EU added further pressure to clean pig prices. At the same time, pig supplies were somewhat more plentiful. As such, finished pig prices were 7p per kg down on the same month in 2013. Prices continued to fall and by week ended 16 August, the EU-spec DAPP had dropped to 158.35p/kg. The GB SPP average for July stood at 161.48p per kg, 2p lower than the previous month. This was the lowest monthly average since the new price series began in April this year. During the same month, the GB APP fell by a similar amount to 163.67p per kg.
 
EU PRICES
According to figures published by the European Commission, EU finished pig prices in July averaged €169.51 per 100 kg. This was around €1 lower than the previous month. Slow demand in the European Union was the key driver of lower prices in recent weeks, although the Russian ban on imports of EU pork continued to weigh on the market. The current level was around €12 below pig prices in July 2013. In the most recent week, ended 17 August, EU finished pig prices stood at €165.20 per 100 kg. For the same week, the difference between the UK and EU pig prices fell slightly to €27 per 100 kg.
 
Poultry
Did you know?
Slowing of Asian Population Growth to Impact Chicken Consumption
As the rate of growth in Asia's human population slows down, average poultry meat consumption per person has increased to 9.4kg, according to the latest estimate. As birth rates decline, so population growth continues to slow. Over the decade to 2023, population growth is projected at around one per cent per year compared with 1.2 per cent in the previous decade. According to USDA long-term projections, while population growth rates in developing countries are expected to decline, they will remain above those pertaining to the rest of the world. Hence, the developing countries’ share of the global population will continue to rise and could account for 82 per cent of the total in 2023. Global poultry meat consumption expanded by 2.5 per cent per year between 2000 and 2011 from 11kg per person per year to 14.4kg on an eviscerated weight basis. The Israelis are the biggest poultry meat eaters in Asia with an average annual consumption of 69.7kg per person in 2011. In contrast, while uptake in India in 2011 averaged around 1.8kg per person, when this is multiplied by the human population of some 1.2 billion, the total quantity of poultry eaten is a massive 2.2 million tonnes. Currently uptake is considered to be in the region of 3kg per person, and the industry considers that this will triple to 9kg by 2030.

Although per-capita chicken consumption in China has remained steady at around 12kg per person between 2009 and 2011, expansion is anticipated as living standards rise. 

Download the October Report 2014 as a PDF file