Payments under the Scottish Upland Sheep Support Scheme (SUSSS) commenced at the start of May. Payment rates for the 2020 year are down a little at £59.80 per ewe lamb compared with £62.36 last year. This is a reflection of higher numbers being claimed under the scheme.
Finished pig prices have started to make a welcome rise. After declining monthly since the middle of 2020, prices started to increase in March. For the week ending the 10th April the EU-spec APP averaged 146.49p per kg up 0.87p on the week. Although still about 20p per kg less than the same week last year, it is now tracking about 2p per kg higher than the five-year average. Plentiful supplies and lower prices on the continent have been weighing on domestic prices. But although EU production is expected to increase in 2021, it is only forecast to rise by 0.7% compared to 1.2% in 2020, according to the European Commission’s short term outlook. The Commission is expecting production in the first half of 2021 to be good, but lower sow numbers should see production lessen in the second half of the year. Exports from the EU are forecast to decline by 2%, but will still be at ‘very high levels’. Because of ASF in China, exports have been significant over the last two years. The sector is now recovering in China, but outbreaks continue to hamper its recovery. Other Asian regions are taking longer to rebuild their herds.
Cattle prices continue to soar. The deadweight cattle price has passed the £4 per kg price for the first time. Finished cattle prices have risen strongly again since March and the GB all prime average deadweight price for the w/e 17th April was 403.7p per kg. This is nearly 80p per kg more than the same week in 2020. R4L prices are comfortably over the £4 barrier at 413.8p and 414.6p per kg for steers and heifers respectively, demonstrating the importance of marketing cattle at the correct time and hitting spec. Cull cow prices also saw a good week-on-week rise with overall GB prices up by 2.5p to 276.4p per kg with those meeting -O4L spec increasing by 5.3p to 295.6p per kg. Slaughter numbers for clean and cull cattle were up on the week but comparisons are difficult due to bank holidays.
The lamb trade has been exceeding all expectations. Whilst the liveweight old season lamb (OSL) trade has seen a decline for the latest week, this is normal for the time of the year. The GB OSL SQQ decreased by 10p per kg to 302.3p per kg in the week ending 21st April, but prices remain some 90p per kg above the same week last year. In contrast, deadweight prices actually rose. For the week ending 17th April the GB OSL SQQ increased by 33.5p to 679.5p per kg; 200p more than the same week last year.
Monthly livestock price information can be found in Key Farm Facts.
Sir Peter Kendall is to undertake a strategic review of the Northern Ireland food and farming sector for the devolved Government. The Independent Strategic Review of the NI Agri-Food Sector (ISRAF) is expected to take 6 months and will look at the challenges and opportunities the sector faces. It will help inform future policy. Including, presumably, future farm support arrangements. For more details see https://www.daera-ni.gov.uk/articles/independent-strategic-review-ni-agri-food
The cold weather has seen milk production ‘checked’. Output had been running ahead of last year’s deliveries and the AHDB’s forecast for this year, raising concern whether processing sites would cope with the increase. But the recent cold spell and lack of grass growth has slowed the seasonal lift in production down. The 7-day rolling average GB milk production to 10th April was just 0.2% above the AHDB’s forecast, compared to 1.1% a week earlier. With the cold, dry spell continuing to curtail grass growth, production is expected to remain constrained. Defra production figures can be found in Key Farm Facts each month.
Commodity and farmgate milk prices remain good. Since the large increase (15%) in the average Global Dairy Trade (GDT) index at the beginning of March there has been little movement. In the two events held in April, the index increased by 0.3% at the beginning of the month and fell by just 0.1% at the latest auction held on 20th April to average $4,110; the highest it has been since early 2014. Recent movements include:
Closer to home, Arla is the headline story again, with a further 1.5 euro cent per kg, equivalent to 1.4p per litre, increase for May for its member suppliers. Such a large increase is a (welcome) surprise. It means the co-operative’s conventional manufacturing price is now 32.79p per litre, with liquid at 31.55p per litre and organic 41.15p per litre. Commenting on the increase, Arla has said ‘commodity market prices have remained relatively stable in the last month supported by healthy demand and our strong operations. The current outlook is stable’. Arla is now firmly leading the way on milk price. There have been a few other announcements including;
Pig farmers affected by the temporary closure of the Quality Pork Producers abattoir in Brechin, Scotland will be able to apply for hardship support through a new £715,000 scheme. The abattoir was closed from 23rd January 2021 for two weeks due to an outbreak of Covid-19, resulting in increasing costs to pig farmers. The scheme will help meet some of these costs. Further details of the scheme will be published on the Scottish Government’s website.
Both beef and sheep farmgate prices remain very strong. The deadweight beef price, after easing a little in early February, has risen again from an already-high level. For the week ending 13th March the deadweight GB all prime cattle price was 380.8p per kg, up 3.8p on the week. This is now 45.4p per kg above year-earlier levels and about 40p per kg more than the five-year average. Prices are being supported by tight supplies; throughput for the week totalled 31,900 head. This is 600 head less than the previous week and 2,700 head down on the same week last year.
In the sheep meat market, deadweight prices have reached a new high. For the week ending 13th March, the GB OSL SQQ was up 19p per kg on the previous week to 634p per kg, over 175p higher than the five-year average. Deadweight slaughter levels were low, 7% down on the previous week and almost 16% below the same week in 2020 at only 179,200 head. In contrast the liveweight GB SQQ fell by just over 3p for the week to 17th March to 289.7ppkg, but this is still a very good price at nearly 80p per kg above the five-year average. Live auctions saw a 1% increase in numbers; strong prices may have encouraged some farmers to market lambs a little earlier, perhaps even attracting some lesser quality or under finished, reducing the SQQ for the week.
Both lamb and beef have shown an increase in household purchases, by volume and spend in the 12 weeks ending 21st February. According to Kantar, the volume of beef purchased was 12.7% up year-on-year, with the spend 15.8% higher on the year. Mince contributed the most to the volume, but steak remains the fastest growing cut. Over the same 12 week period the volume of lamb purchased increased by 16.4% and the spend grew by an impressive 21.7% year on year.
It is a different picture for the pig market, but prices may be stabilising. For the week ending 13th March the EU-spec SPP fell by a marginal 0.04p per kg to 139.41ppkg; this is 23.81p per kg less than the same week in 2020. However prices for the previous two weeks had seen a rise, so markets may be finding some balance. Plentiful supplies and lower pig prices on the continent continue to weigh on the domestic price. Slaughter numbers were down slightly (1%) on the previous week to 199,400 head, but 12% higher than the previous year and 16% above the five year average.
From 1st April poultry keepers will be allowed to let their birds outside again. Due to the risks imposed by Avian Flu, housing restrictions were brought in for all captive birds back in December. But following a reduction in the risk of the disease to both wild and kept birds, the alert level has reduced to ‘medium’ and housing restrictions will cease from midnight on 31st March. Even so, the enhanced bio-security measures announced back in November will still apply. In addition the devolved administrations have put out joint guidance on ‘How to prepare for when your free-range birds can be let outside again’. This can be found at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/972412/advice-to-poultry-keepers-preparing-range.pdf
At the first Global Dairy Trade (GDT) auction held in March the average price index increased by a huge 15% to $4,231 per tonne. Whilst it fell back by 3.8% at the latest event, to $4,089 per tonne this is still the highest price the index has been since early 2014.
Strong demand, particularly from China, together with New Zealand’s seasonal decline in production is the main reason behind the price increase. The Whole Milk Powder (WMP) price led the increases, rising to $4,083 per tonne. Although little of this product is produced here in the UK, it should still support domestic farmgate prices as more milk globally will be directed into the powder, leaving less available for other products.
All eyes will be turning to the spring flush. The AHDB is forecasting March’s milk production to be slightly less than last year but April and May higher (0.8% and 1.5%). Last year many producers limited their production in these months because of Covid-disruptions. This year the industry is in a much better position to deal with the flush and lockdown restrictions should begin to ease, increasing food service demand.
The headline story is a €1.5ppl increase for Arla Members from April; a big increase particularly for the time of the year. This takes its standard milk price over 30ppl. Arla Direct suppliers (Non Members) will receive a more modest 0.25ppl. Arla has also announced its 13th payment will be increased from €1 to €1.75ppl for the 2020 calendar year.
Other price announcements include:
The UK’s third and fourth largest liquid milk processors are in merger talks. Freshways Dairy and Medina Dairy are looking to combine their businesses. Between them, they process around 500m litres of milk per year and have a turnover of £400m. Both companies have a large presence in the foodservice sector and were hit hard by the Covid-19 lockdown.
Arla looks set to close its Trevarrian soft cheese creamery by summer 2021. Consultation has already started with its 37 members of staff at the Cornish site where it produces a range of Brie and Camembert. The loss of key own-label cheese supermarket contracts together with Covid-induced volatility in the food service sector has been the final straw, following a decline in sales for a number of years. The farmer suppliers, should not be too affected as the milk from the eight Arla Members will now go to Arla’s sites in Taw Valley and Westbury.
Livestock Auctioneers Association (LAA) has reported an increase in throughput at livestock markets during 2020. Marts may have required a higher number of staff, and experienced tighter bio-security measures and other operational costs associated with keeping the markets open thoughout most of the pandemic, but figures show more than 11 million animals were sold through live sales rings during the year. Just under 10 million sheep and over 1 million head of cattle sold were sold, an increase of 370,000 and 30,000 head respectively, compared to 2019. Total turnover was up by £260 million to over £1.8 billion.