Processors Warned About Tight Margins as Cattle Supplies Tighten27 September 2013
UK, NORTHERN IRELAND – Processors have been told to expect tight returns through August as cattle prices have increased with no sign of retailers moving.
Finished cattle prices were 42.3p/kg higher last month than in August 2012 as a matrix of factors has contributed to tight supplies.
Increased culling earlier in the year due to bad weather is combining with lighter carcases following the bad summer of 2012 and the forage crisis of the spring.
Supplies were also tightened further by a drop in cow slaughter. This was back almost 10 per cent to just over 7,000 head for the month.
The Livestock and Meat Commission (LMC) described this as ‘welcome news’ for producers trying to cover production costs but said that ‘processors margins will potentially be tighter year on year’.
A market analyst at the LMC said: “The increase in prime cattle prices has been driven by a decline in the availability of prime cattle with slaughterings during August 2013 totalling 23,547 head, an 11 per cent decline on throughput in August2012.
“The average carcase weight has also come back year on year, most likely due to the combined effects of last year’s poor summer and fodder difficulties this spring.
“The average prime cattle carcase weight in August 2013 was 321.2kg, 18.7kg lighter than the previous August when the average carcase weight was 339.9kg.”
Calf registrations have continued to remain low, almost 6 per cent down on August 2012. Dairy sired calves were back the most – down 7.1 per cent.
LMC experts say this is ‘not surprising’ given the current trend for low calves after poor fertility led to cow slaughter last winter.
TheMeatSite News Desk