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AHDB Cattle and Sheep Weekly


05 December 2014

EBLEX Cattle and Sheep Weekly 5 December 2014EBLEX Cattle and Sheep Weekly 5 December 2014


Cattle Weekly

Deadweight prime cattle trade levels

In the week ended 29 November, the GB all prime deadweight average price was unchanged on the week at 352.7p/kg. Reports indicate that the majority of procurement for Christmas has been completed, which in some part could explain the stability in this week’s trade. AHDB/EBLEX estimates suggest that throughputs of prime cattle were in line with the previous week, again giving some evidence that supply and demand has been more closely matched. However, while the overall average steer price was unchanged on the week at 355.0p/kg, R4L steers edged back a fraction to 365.5p/kg. In contrast, the overall heifer price was up half a penny on the week at 356.6p/kg, while R4L heifers strengthened a penny to 363.0p/kg. Young bulls were, on average, back 2p on the week at 317p/kg. The cull cow trade continued its seasonal downward trend with the overall average being back 3p on the week to 202.1p/kg.

Despite the deadweight trade remaining broadly level in week ended 3 December, with many auction marts holding Christmas shows and sales, prices for prime cattle traded in the ring were up on the week. The GB all prime average increased 10p on the week to average 197.5p/kg.

Cattle trade at auction firmer in recent months

Since the summer, the deadweight cattle trade has experienced a slow and steady recovery. With a more positive trading environment for producers, it is no surprise that the finished cattle trade at GB auction marts has moved in a similar direction. In November, the all prime average reached its highest monthly average since January at 187.5p/kg, having increased over 15p/kg since the low point of theyear in June. Steers have moved up 13p over the five-month period, while heifers are 10p dearer. The strengthening in young bull prices is particularly notable. Having been subjected to particularly stringent penalties earlier in the year, the average in November was up 17p since June. These firmer market conditions have not been limited to the finished trade.

 

At Autumn store cattle sales demand was particularly robust, despite a good supply of cattle coming forward. The combination of cheaper feed and the long-term tight supply situation may have given finishers some confidence. Hereford cross 18-month-old steers averaged £804 per head in October, up over £55 since June and dearer than at the same time last year. Continentals of the same age have moved up £145 over the same period, to average £970 per head, although they are still modestly cheaper than last Autumn. Despite the difficult market conditions this year, the expectation for finished prices into 2015 and beyond is still firm.

Sheep Weekly

Lamb trade at its highest point since July

Following a period of relative stability in the liveweight lamb trade since mid-November, the SQQ at GB auction marts picked up pace in week ended 3 December, increasing a considerable 7p on the week to average 181.6p/kg. After a subdued start to trade in the week, the SQQ peaked on Wednesday 3 December at 187.8p/kg, up 15p on the week. It is likely that the key driver of this uplift will be the many Christmas shows and sales taking place at this time of year. However, at 129,000 head, the number of lambs penned nationally fell 8% on the week, which may have helped to tip the supply and demand balance more in producers’ favour. The SQQ is now at its highest point since July, tracking around 10p above last year’s level.

The cull ewe market continued its robust performance in the week, with the average price increasing £3 on the week to almost £65 per head. This came as the number of ewes marketed was notably lower on the week. At this level, cull ewes are achieving around £17 per head more than at the same time last year.

Less sheep meat coming from ‘down under’

UK trade figures for September show that sheep meat imports had fallen back below year earlier levels. Latest figures from New Zealand and Australia suggest that trend will continue for the rest of this year. In September and October, New Zealand exported 11% less sheep meat to the UK than in the same months last year. This product would mostly have arrived here during October and November. At this level, volumes were as much as 28%, or 2,150 tonnes, lower than in 2012, suggesting that imports won’t exert the same downward pressure on UK prices that they did in winter 2012-13. Prices were also substantially higher than in 2012, although only slightly up on last year.

In recent months, higher imports from Australia have mitigated the fall in New Zealand shipments to some extent. However, export figures for September suggest this may be over too, with 19% less sheep meat sent to the UK than in September 2013. Reports from New Zealand suggest that a slow start to the season means that processors have struggled to secure sufficient lambs to satisfy export demand for the Christmas trade. This may mean that UK buyers have had to switch demand to lamb from the home market, contributing to the recent price increases

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