Beef Sales Struggle While Lamb Continues to Perform Strongly13 August 2013
UK - With reports from the plants in recent weeks of difficulty in finding markets for the beef they are processing and a drop in the base quotes as a result it is perhaps a useful time to look at the latest consumer data from Kantar, write market analysts at the Livestock and Meat Commission.
When considering the latest data for the four week period ending 7 July 2013 the volume of beef purchases declined by eight per cent when compared to the corresponding period in 2012 with all major cuts of beef showing a decline in total volume sales year on year.
In the four weeks ending 7 July 2013 sales of beef roasting joints were down 17.4 per cent while sales of beef stewing meat were down 14.2 per cent on the same period the previous year. These figures for beef roasting joints are perhaps not surprising given the cold and wet summer of 2012 compared to the record temperatures recorded during summer 2013 to date.
Over the four week period ending 7 July 2013 the average retail beef price was £7.54 per kg, a seven per cent increase year on year. One contributory factor to this increase in the beef price has been the reduction in the amount of beef sold on price reduction promotions.
Sales of beef mince were back four per cent year on year however the six per cent increase in the average price of mince has meant overall consumer expenditure is up two per cent year on year.
However, it was not all bad news for beef sales in the four weeks ending the 7 July with sales of burgers and grills up 29 per cent year on year due to increased opportunity for barbeques. Beef ready meal sales have continued to suffer as a result of the horse meat incident with sales of chilled ready meals down five per cent and sales of frozen ready meals down sixteen per cent year on year.
If we consider the 52 week period ending 07 July 2013 the beef expenditure was up four per cent on the previous 52 weeks at £2.1 billion. This was driven by the six per cent increase in the average retail price year on year to £7.18 with the volume of beef sold back two per cent when compared to the previous 52 week period.
Household penetration was back one per cent year on year to 86.1 per cent with a two per cent drop in the average weight purchased per household to 12.6kg.
The story has been much more promising for lamb with expenditure in the four weeks ending 7 July 2013 up eight per cent on the corresponding period in 2012. This increased expenditure between the two periods has occurred due to a 15 per cent increase in the volume of lamb sold.
The average price per kg of lamb in the 2013 period was £7.57 per kg, a seven per cen reduction on the same period in 2012. The increase in the volume of lamb purchased was driven by a 42 per cent increase in the volume of lamb leg roasting joints when comparing the two four week periods.
Expenditure on frying and grilling chops also increased, up 13.6 per cent year on year. Some cuts of lamb have performed less strongly with sales of lamb shoulder roasting joints in the four weeks ending 7 July 2013 back 27 per cent year on year.
This drop in lamb shoulder joint sales was driven by shoppers switching to the leg roasting joints due to strong promotional activity. Meanwhile sales of lamb stewing pieces were also down between the two periods, back 23.4 per cent year on year.
While lamb has been performing strongly in GB during 2013 to date, in terms of both the volume and value of sales, at the expense of beef and pork there has been some indication in recent weeks of lamb sales coming under pressure.
This may be due to consumers switching to burgers and sausages for the barbeque instead of purchasing lamb. This reduced demand combined with a surge in the supply of lambs in GB over the last number of weeks led to the marked drop in the deadweight lamb prices in the week ending 27 July 2013.
However despite the drop in quotes and deadweight prices in recent weeks there have been some signs of the lamb market stabilising with quotes from the plants in NI this week increasing to 410p/kg for R3 grading lambs.
The plants have reported an improvementin the lamb market in terms of sales over the past week to ten days. A steady trade was indicated in NI last week with the deadweight lamb price up marginally on the previous week to 391.2p/kg while in GB the deadweight price was up 3p/kg to 412.7p/kg.
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