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Supplies to Tighten Towards 2015

14 August 2014


UK - Forecasts for British beef and veal continue to indicate the situation for the second half of the year and into 2015 is one of lower availability, according to the latest AHDB Market Intelligence/EBLEX information.

As data from the British Cattle Movement Service (BCMS) indicated in December and April, there has been a modest increase in supply in the first half of this year. This was influenced by weaker market conditions at the end of 2013, which encouraged producers to retain cattle for marketing in 2014.

Currently, UK beef production is two per cent ahead of 2013 levels, with much increased carcase weights compounding slightly higher slaughter numbers, according to AHDB/EBLEX senior analyst,
Debbie Butcher.

However, BCMS data in April recorded fewer young cattle on the ground, therefore a drop in prime cattle availability is expected towards the end of 2014.

In addition, the UK adult cattle kill in the first half of 2014 is back on 2013. This may indicate liquidation of breeding stock from the overall herd has slowed, although this may relate to greater confidence in the dairy sector.

With a smaller, younger breeding herd and better seasonal conditions, adult slaughterings for 2014 are forecast to be back on 2013 levels. They may fall again in 2015, unless further price falls and CAP reforms lead to more producers leaving the industry.

Despite growth slowing, beef and veal production is forecast to remain modestly ahead of 2013, with tightening supplies towards the end of the year mitigated by improved carcase weights for all classes of cattle.

However, in 2015, production is forecast to come back two per cent as lower cattle supplies prevail.

Export volumes for 2014 are forecast to be below 2013 levels, although this depends on price, supplies and competitiveness.

Firm demand for manufacturing beef has the potential to support export prospects into 2015. However, the strength of Sterling could influence this. Imports this year are forecast to be ahead of 2013, although the uplift in the first five months of the year, on the back of higher production in Ireland, is likely to slow. Current indications from Ireland are for supplies to remain strong over the summer, but to tighten later in the year.

With more domestic supply and Ireland’s impact on imports, the UK beef market has been under pressure in 2014 so far. Unless consumer demand picks up markedly, any significant upwards pressure on price over the summer months looks unlikely.

However, the forecasts for availability later this year and into 2015 offer a more positive picture. With lower production, increased exports and lower imports, UK market supplies next year are forecast to reduce, so the possibility of firmer prices is improved.

Actual and forecast UK beef and veal consumption (’000 tonnes)
  2013 2014 2015
    Forecast Forecast
Production 848 875 853
Imports 389 402 394
(Fresh/frozen) (295) (306) (295)
(Processed) (94) (96) (99)
Exports 131 126 133
Total consumption 1,106 1,151 1,114

Source: Defra, AHDB / EBLEX

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