Category: Dairy & Livestock

The AHDB has updated its forecasts for beef production in 2024 and 2025 following an increase in prime cattle and cow slaughterings.  According to Defra the number of prime cattle slaughtered in the UK over the first 10 months of the year has increased by 5% compared with 2023, to 1.78 million.  The majority of the increase has been driven by heifer slaughter, with the biggest uplift experienced in the 3rd quarter of the year.  In October prime cattle slaughter increased 13% year-on-year.  This could mean keepers taking advantage of the high prices resulting in fewer heifers being retained for the breeding herd.  The year-to-date slaughter numbers in England and Wales have risen by 5%, Scotland has remained stable but Northern Ireland has seen a 12% rise in numbers.

Due to the increase in recent slaughter numbers, the AHDB has revised its slaughter forecast for 2024 upwards to 2.11 million head; 4% higher than in 2023.  However, taking this higher slaughter number into account for this year and current UK cattle data, it is expecting a sharper decline in slaughter numbers in 2025.  It is now forecasting a 6% reduction compared with 2024 and 2% lower than 2023; totalling 1.99 million head.

It is a similar story with cow slaughterings.  Defra figures show that over the first 10 months of the year, 511,000 cows have been slaughtered, up 3% over the same period in 2023, with the uplift mainly due to beef cows – which is likely to mean further declines in the beef breeding herd, especially as we have already seen an increase in heifer slaughter.  Cull cow slaughterings in October were 9% up year-on-year.  Again, Northern Ireland has seen a big uplift, a record kill of 47,000, up 13,000 since the previous month.  The increase in cow cullings has seen the AHDB revise its figures for 2024 upwards to 624,000 head, 2% higher than in 2023.  For 2025 the forecast is for UK cow slaughter to total 599,000, 4% lower than 2024 and 2% less than in 2023.

In terms of beef production, prime cattle carcase weights are averaging 1.4kg heavier than in 2023 at 344kg, this, combined with slaughter estimates, means AHDB is forecasting total UK beef production in 2024 to be 933,000 tonnes – up 4% compared with 2023.  For 2025, it is forecasting total UK beef production to decline by 5% on the year and to be 2% less than in 2023 at 883,000 tonnes.

Currently prime cattle prices are at a record high.  The GB deadweight all steer price for the week ending 30th November was 538ppkg, up nearly 56ppkg on the year.  With supplies being higher than expected, strong demand is supporting farmgate prices.  There is usually an uplift in prices as we head towards Christmas, but this good demand should bode well for farmgate prices into 2025.

Production

Domestic milk deliveries have been increasing steadily since September.  According to data from the AHDB, GB milk deliveries for w/e 16th November increased by 0.5% compared with the previous week and are now running 4.9% above the same week in 2023.

Prices

The Global Dairy Trade (GDT) average price index increased by 4.8% and 1.9% respectively at the events held in November.  The average price now stands at $4,089 per tonne – the first time it has been over $4,000 since July 2022 and is 25% higher than at the same time last year.  Farmgate prices also continue to increase, two notable rises from 1st December are:

• a 1.5p per litre increase for suppliers to First Milk, taking its manufacturing standard litre to 45.35ppl
• Barbers has announced a 1.53p per litre increase to take their standard litre to 46.10ppl.

Both beef and sheep deadweight prices have risen according to the latest AHDB figures.  The deadweight cattle price has been increasing week-on-week since the beginning of July.  The GB deadweight all steer price has risen by 46p per kg over that period to 525p per kg for the week ending 16th November.  This is 42p higher than for the same week in 2023.  Tight supplies are continuing to support prices.  The estimated GB prime cattle slaughter in the w/e 16th November was 4.6% (1,600 head) lower than the previous week and numbers have been declining over the last four weeks.  Looking ahead, BCMS data suggests supply could tighten further.  However, it is not just limited supplies supporting prices, demand is also reported to be strong.  The latest retail figures from Kantar for the 12 weeks ending 3rd November 2024 show retail spend on beef products increased by 2.5% year-on-year.

The deadweight lamb price has seen an uptick in price over the last couple of weeks.  For the week ending 16th November the GB deadweight SQQ overall price was 649p per kg, up 23p on the week and some 59p per kg higher than for the same week in 2023.  However, in contrast to beef, supplies of lamb have been increasing.  The AHDB estimated kill was 5% up on the week before at 224,300 head, although yearly throughput to date is 8% down on the same period in 2023.  Similar to beef, the price is being supported by strong consumer demand.  According to Kantar, there was a 6.8% increase in retail volumes purchased for the 12 weeks to the week ending 3rd November.

Tesco and its milk suppliers Arla and Müller UK & Ireland have joined forces to enhance the sustainability of the dairy sector.  The new partnership looks to ‘accelerate the reduction of emissions, farm in harmony with nature and commit to higher animal welfare standards in the dairy industry’.

The Future Dairy Partnership will include all 400 of Tesco’s Sustainable Dairy Group (TSDG) farmers across the UK.  The two processors and the retailer are also broadening the partnership by reaching out to other organisations across the dairy industry for input and support.

Building on the foundation of the Tesco Sustainable Dairy Group (TSDG), the partnership will see the two milk processors working together to ‘innovate, share learnings and collaborate to go faster in reducing emissions’.  Farmers that supply Tesco are being consulted on the programme and will be key in creating the programme roadmap.  The Future Dairy Partnership will drive progress across several key areas, including:

• Innovation: on-farm projects, such as methane-reducing feed additives, nature-led initiatives alongside reducing the carbon footprint and how these innovations can be up-scaled across the UK dairy industry
• Industry reports: an industry-wide report will be produced that highlights the pathway to more sustainable dairy and the innovation and financial support needed across the agriculture sector to achieve this ambition
• Sustainable Dairy Blueprint: to provide farmers with clear guidelines on sustainability targets and ethical practices, whilst ensuring farmers and processors have the flexibility to select the methods that best suit their operations and still meet these targets.

Highly Pathogenic Avian Influenza (HPAI H5N1) has been confirmed in commercial poultry at premises in St. Ives, Cornwall.  This is the first case of the H5N1 strain this season.  Earlier in the month (5th November), APHA confirmed a case of the H5N5 strain in commercial poultry in East Riding of Yorkshire. Both strains have been detected in wild birds in the South West of England.  All poultry on the infected premises will be humanely culled and a 3km protection zone and 10km surveillance zone will be put in place surrounding the premises.

The risks of contracting the disease is still classified as low where good biosecurity is consistently applied at all times.  The latest situation can be found at https://www.gov.uk/government/news/bird-flu-avian-influenza-latest-situation-in-england?utm_medium=email&utm_campaign=govuk-notifications-topic&utm_source=0592b448-fef7-4896-bf76-0e64feff9d47&utm_content=daily#latest-situation

The AHDB is forecasting GB milk deliveries to be down -0.3% for the 2024/25 milk year.  Supplies to date are down by -0.9% due to poor weather impacting grass growth and quality through the spring and summer.  But a recovery is forecast for the remainder of the year.  Deliveries in September were ahead of last year and the continued up-tick in the farmgate milk price should give producers some encouragement to increase winter production.

Global milk production continues its ongoing decline with latest data (July) showing a -0.4% fall year-on-year.  There has been growth in New Zealand and Australia but this is being more than offset by declines in Argentina, the EU and the US.  This means milk supplies continue to be tight which has fuelled the growth in milk prices.  Expectations are for global milk production to remain stable over the next 12 months, with a small decline of -0.1% in the key exporting regions.

Low production, strong demand and declining stocks saw fat prices on UK wholesale markets reach record-breaking levels in September.  Butter rose by £620 per tonne to £6,730 per tonne and bulk cream by £450 per tonne to £3,147 per tonne in September.  Reports suggest these prices may have peaked especially as production increased in September, but Christmas demand should help to support prices and the availability of domestic dairy products remains tight.  However on the global market, the GDT price index fell by -0.3% at the latest event held in October.  SMP and Butter fell by -1.8% and -0.3% respectively, while Cheddar rose by +4.2% and WMP remained the same at $3,553 per tonne.

Domestic farmgate prices continue their upward trend, with some big increases announced for November including:

• a 1.5ppl increase announced by Wyke Farms taking their manufacturing litre to 44.48ppl
• Barbers has announced a further 1.54ppl increase, this is 8 consecutive months of increases and takes its manufacturing price to 44.57ppl
• suppliers to Muller who meet the conditions for Muller Advantage1 will receive a 1ppl increase to 42.25ppl
• Freshways, after a 1ppl increase in October have announced a further 1ppl for November taking their standard litre to 42ppl.

The takeover of Yew Tree Dairies in Lancashire, by Muller, has been approved by the Competition and Markets Authority (CMA).  The CMA found no issues with the deal, announced in June, despite fears that it reduces the number of milk purchasors.

The pig price has been relatively stable over the past year, albeit drifting slowly downwards.  The SPP (EU spec) was trading in the region of 212p per kg deadweight at the beginning of the year and is now just under 208p per kg; falling just 4ppkg.  This is around 12p per kg lower than October 2023, however last year prices were at a record high and prices are currently substantially above the 5-year average.  Furthermore the cost of production has hardly changed since Q2 2023 and, although net margins have fallen slightly, they are still positive around £12-£14 per pig.

In terms of pigmeat production, the AHDB is forecasting a 2.7% increase in 2024 compared with 2023 to 951,000 tonnes.  In the first eight months of 2024 clean pig kill totalled 6.78 million head.  This is up 1.6% on last year but the increase in production has also been driven by higher carcase weights, averaging at 90.1kg January to August; an increase of 1.3kg compared with 2023.  Throughputs are expected to continue to increase through the rest of the year.  Looking ahead to 2025, smaller year-on-year growth is forecast; pig meat volumes are estimated to increase by just 0.9% on 2024, driven by a 0.8% increase in clean pig slaughter with minimal change in carcase weights – subject to no diesease outbreaks.

The latest Defra census showed that the English female breeding herd has fallen 2% in 2024.  However, AHDB is forecasting minor growth in the pig breeding herd over the next couple of years, if market conditions remain favourable.  But this would only see the herd size return to 2022/2023 levels, with no recovery to historic pig population size expected in the foreseeable future.

In terms of trade, in the first half of 2024, UK export volumes of pig meat have fallen 2.4% to 148,000 tonnes, the lowest volume since 2015.  This is due to subdued demand from China, and increased competition from major exporting countries such as Brazil and the USA.  The UK is very reliant on the Aisian markets for carcase balance – in particular, offal.  By contrast, imports have seen year-on-year growth in the first half of the year, up 1.4% to 387,000 tonnes.  The EU pig price has fallen much quicker than our domestic price and the price differential has widened meaning EU pigmeat is more attractive to some purchasers – further bolstered by a weakening Euro.  Little change is expected over the remainder of the year and therefore UK exports are forecast to end the year back by 2-3%, meanwhile imports increase by 1-2%.

Into 2025, it is expected that export volumes will continue to be subdued and import volumes will remain high if EU prices continue to hold a large price differential.   Something to keep any eye on is increased geopolitical tensions between the EU and China.  The EU is the biggest exporter to China, but the ongoing fallout between the two could see China imposing high tariffs on EU product.  This could mean surplus product on the market putting downward pressure on domestic prices.  Although, there could be potential for us to increase exports to China.

In the first seven months of the year, retail demand for pork fell 2.2% compared with 2023, according to Kantar, not helped by poor summer weather.  Meanwhile the foodservice market has performed better than expected with volumes estimated by the AHDB to be up 5.2%.  Overall, pork volumes for 2024 are expected to be down by 2% compared to 2023 and by 4% compared to 2019. But this is hoped to be more stable in 2025, if inflation continues to decline and wages rise.

Beef

The prime beef farmgate price has been on an upward trajectory since July.  The GB deadweight all-steer price has risen by over 35p per kg over that time to average 513.8p per kg and some 524.5p per kg for those hitting R4L specification.  The all-steer price is 31.9p per kg more that at the same time in 2023.  Furthermore the strong prices look set to continue as seasonal demand continues to outpace supplies of cattle, as we move into procurement for the Christmas period.  Demand is reported to be strong across both retail and foodservice sectors.  Data from Kantar for the 12 weeks ending 29th September shows an additional 2,100 tonnes of beef purchased compared to 2023.

In contrast, the cull cow price has shown a decline as record numbers come forward ahead of winter housing.  The deadweight price fell by 2p per kg to 353.6ppkg for the week ending 19th October.

Sheep

The GB new season lamb SQQ price has been easing downwards since the end of August, but looks to be stabilising as deadweight prices increased 1p per kg for the week ending 19th October to average 618.5ppkg.  Over this time the difference between 2024 and 2023 prices has narrowed, but 2024 values are still 48p per kg higher than last year.  Tight supplies continue to support farmgate prices; the GB clean sheep kill to the week ending 19th October is estimated to be down by 8.5% on the year to 8.46m head.  However, demand is also strong.  According to the latest Kantar data, for the 12 weeks ending 29th September, lamb outperformed the total grocery market, with a 5.5% increase in volumes purchased.  This, combined with a 4.8% increase in average prices paid, resulted in a 10.6% increase in retail spend on lamb products in this period.

Although midge activity is slowing down, new cases keep coming to light, mainly through active surveillance and pre-movement testing.  Following identification of a new case in cattle on the Buckinghamshire/Northamptonshire border on 25th October the restricted zone has been extended on to include all of Northamptonshire.  The zone now covers Bedfordshire, Berkshire (part), Buckinghamshire, Cambridgeshire, City of Kingston upon Hull, East Riding of Yorkshire, East Sussex, Essex, Greater London, Hampshire (part), Hertfordshire, Kent, Leicestershire (part), Lincolnshire, Norfolk, Northamptonshire, Nottinghamshire, Suffolk, Surrey and West Sussex.  To keep up to date go to https://www.gov.uk/government/collections/bluetongue-information-and-guidance-for-livestock-keepers.

Outbreaks of the bluetongue virus continue to spread in the east of England.  Since the end of August the number of confirmed cases has risen to nearly 100.  There are likely to be a number of further infections in livestock that have not been formally identified.  The latest information on the outbreak can be found at  – https://www.gov.uk/government/collections/bluetongue-information-and-guidance-for-livestock-keepers .  Defra has authorised the use of three bluetongue serotype 3 (BTV-3) vaccines within the United Kingdom.  Unlike the authorised vaccines for other BTV serotypes, these BTV-3 vaccines only reduce viraemia rather than prevent it.  This means they reduce the effect of the disease but do not stop animals being infected.  All the usual movement controls still therefore apply to vaccinated stock.  More details are to be found at – https://www.gov.uk/government/collections/bluetongue-serotype-3-btv-3-vaccine-permits.