Category: Dairy & Livestock

Based on the BCMS calf registrations data for England and Wales during 2023, there is a notable increase in the numbers of Aberdeen Angus calves (up 31% since 2019) and in Wagyu calves (up by over five-fold since 2019). The key trends for the top-10 breeds are summarised in the table below.

England and Wales Calf Birth Registrations – 2023 versus 2019

Source: BCMS

Across England and Wales, over 1.9 million calves were registered during 2023, a 3% increase on 2019. As noted above, Aberdeen Angus calf registrations are up considerably and 2023 registrations stood at nearly 525,000, representing a 27% share of total registrations. Other British breeds such as British Blue, Hereford, and Beef Shorthorn also posted increases of 11%, 4% and 9% respectively.

In contrast, continental breeds have decreased with Limousin, Charolais and Simmental down by 17%, 13% and 21% respectively. Registrations of Stabiliser calves, a breed with US origins and containing genetics from Hereford, Angus, Simmental and Gelbvieh breeds has also seen a sizeable (38%) increase.

However, it is the Wagyu breed which has made the most significant progress in recent years, posting a 524% increase since 2019. Whilst its share of total registrations (2%) is still low, this is substantial progress and the breed appears to be gaining favour within the dairy sector in particular.

The latest statistics illustrate that farmers are increasingly opting for breeds that are perceived to produce higher quality beef and are easier to manage on-farm. Linked with this, the increased utilisation of sexed-semen is also notable elsewhere in the BCMS data as the populations of male dairy cattle aged 0-12 months are 20% lower across the UK than in January 2023. With more farmers selecting breeds perceived to offer higher meat quality, the next step is likely to be a greater focus on genetics which can produce quality beef with lower methane emissions.

Defra’s UK production figures for March show deliveries totalled 1,322m litres, the same as in 2023.  UK production for the milk year (April-March) ended on 14,880 m litres; the lowest since 2017/18.  With the wet ground conditions, turnout has been delayed which will impact production through the spring flush.  Furthermore, land work has also been delayed which could affect grass and silage quality for the coming season; as a result the AHDB is forecasting a slight decline in GB production for 2024/25 – down by 0.6%.

Global milk deliveries were also lower in both January and February by -0.9% and 0.7% respectively, year-on-year.  This is the imapct of higher input costs and poor demand.

In terms of commodity markets, there seems little direction at the moment as buyers wait for the spring flush.  However, with UK deliveries trailing below last year and reports from Ireland and France of lower production, milk volumes in Europe are low.  Germany is however reporting production ahead of last year.  The GDT offered no direction at the latest event, rising by just 0.1% to $3,590.

Beef

Cattle prices remain strong but fell back throughout March and are just below 2023 levels.  However, prices appear to be stabilising now.  The GB deadweight prime all steer price for the week ending 13th April 2024 stood at 487.5p per kg; compared with 490.8 p per kg for the same week in 2024.  The cull cow price has climbed steadily since the turn of the year, from 316.9p per kg at the start of 2024 to 356p per kg for the week ending 13th April.  Even so, it is still some 27p per kg below last year’s record levels.  GB slaughterings are estimated to be up on the year, with prime supplies seeing a 2.7% (13,100 head) growth on the year-to-date.  But prices are being supported by demand, which is reported to be good ahead of the summer BBQ season.  Furthermore, Irish cattle prices have been trending up over recent weeks due to firm demand adding further support to GB beef values.

Sheep

The GB sheep market has experienced some exceptional prices over the spring.  Following a slight dip a couple of weeks ago, prices have increased again; the GB deadweight SQQ overall price for the week ending 13th April rose by 21p per kg on the week to 850.7p per kg, compared with 636.3p per kg in 2023.  Prices have remained strong post-Easter supported by tight supplies.  The AHDB estimates slaughterings to be down by 7.6% (238,000 head) for the year-to-date.  The wet weather is also impacting finishing of hoggs and will mean spring lambs are likely to take longer to come to market.

Looking ahead, the AHDB has updated its domestic sheep meat production for the year (see https://abcbooks.co.uk/sheep-outlook-3/ for the previous forecast).  It is now estimating supplies to fall by -1.4% to 282,000 tonnes (previously -1%).  The update follows the lastest livestock numbers from Defra, which reports a larger decline in the breeding flock.  In turn, the lamb crop, which was previously forecast to increase by 2%, is now expected to decline by -1.2% compared with last season and this doesn’t take into account any impacts from Schmallenberg or Bluetongue virus.

However, the carryover of old season lambs from 2023 to 2024, although still down on the year, is not expected to drop by as much; the fall in carry-over is now estimated at -4.3%, compared with the previous figure of -10%.  This is due to the assumption that more ewe lambs, previously expected to go into the breeding flock, will be slaughtered.  In terms of new season lamb slaughterings in the first six months of the year, this is now expected to be around 1.57m head (previously 1.6m).  Slaughter in the second half of the year assumes a typical pattern and is forecast to be 6.4m head (previously 6.6m); growth of just under 1% compared with the same period in 2023.  Adult sheep slaughterings across the year are forecast to fall by -3%.  The revised forecast show supplies tightening and whereas, previously, the increase in product in the second half of the year could have put downward pressure on prices, this has reduced.  The main concern for the sector will be from reduced consumer demand because of a switch to cheaper meats.

The AHDB has released the first of four reports looking at beef and lamb production standards.  The independent reports, carried out by Birnie Consultancy, are comparing the voluntary assurance standards (Red Tractor) and regulatory requirements of the English beef and lamb sectors with other key suppliers.  The first report compares the English standards with those of the dominant assurance schemes of Australia and New Zealand, namely the Livestock Production Assurance (LPA) scheme in Australia and the New Zealand Farm Assurance Program (NZFAP).

For the purposes of the report, 14 catergories were studied;

• Traceability, Documentation and Assurance
• Personnel
• Food Safety
• Housing and Shelter
• Feed and Water
• Husbandry Procedures
• Youngstock Management
• Animal Health and Welfare
• Animal Medicines
• Biosecurity and Disease Control
• Livestock Transport
• Vermin Control
• Fallen Stock
• Environmental Protection

Each of the assurance schemes were ‘scored’ against these categories.  Each of the categories were also weighted to reflect their relative importance.

The overall findings show that when directly compared, the Red Tractor scheme obtained a higher overall weighted score than NZFAP, which inturn out performed the LPA scheme.  Effectively, this means that the Red Tractor scheme is more in-depth and comprehensive than equivalents in Australia or New Zealand.  Red Tractor achieved higher scores than the LPA and NZFAP schemes in most areas, the only exception being biosecurity and disease control.  In addition, the review found that Red Tractor was consistently found to be ‘more prescriptive, containing more detail than the other schemes, therefore allowing a clear review of each categories requirements’.  In terms of audit frequency and types of audit, Red Tractor are conducted in-person every 18 months.  NZFAP in-person audits are required every three years, although some processors may require more frequent visits.  The LPA inspects around 3,000 farms annually, with two thirds drawn at random, although as the number of farms in the scheme is not published, it is difficult to understand what % this is.

The review also looked at the legislative framework in each country.  It found a good legislative base for the standards with the exception of the biosecurity & disease control and vermin control categories.  But the major challenge of legislation is that ‘in most cases it is not inspected on anything approaching a regular basis’, and it is this that is addressed by farm assurance, where schemes with regular inspection intervals ensure that there is both regulatory and scheme compliance.

The full report report, which can be found at https://ahdb.org.uk/knowledge-library/comparison-report-of-international-beef-and-lamb-standards-part-1 is part one of a series, with three further reports due to be released during 2024 which will draw comparisons with standards in other parts of the world;

• Key EU Countries – due July 2024
• North America – due September 2024
• South America (Brazil) – due November 2024

The AHDB says the reports will deliver ‘clear evidence to support crucial discussions, including the impact of standards on farmgate returns, the involvement of the wider supply chain in conversations about future standards, and maximising value from higher standards when it comes to market access or higher prices’.  The results form the review will also provide evidence to recently announced independent Farm Assurance Review and will be central in helping AHDB to underpin its messaging in key areas, such as marketing and exports.

A report on cereals assurance and UK imports is also planned for summer 2024.

Defra has extended the deadline for responses to its current consultation on Bovine TB to 13th May 2024 (previously 22nd April).  See our article of 20th March for further details – https://abcbooks.co.uk/bovine-tb-8/.

The Scottish Government has launched a consultation on electronic ID technology for cattle.  Farmers are being asked to give their views on plans to tag all new-born cattle with electronic ear-tags.  Furthermore the consultation is seeking views on updating the current non-computerised system with EID, the use of an online register for cattle, and the removal of paper cattle passports for EID identified animals.  The full consultation can be found via https://consult.gov.scot/agriculture-and-rural-economy/cattle-identification-and-traceability/.  Responses need to be made by 27th June 2024.

Annual payments under the 2023 Scottish Suckler Beef Support Scheme (SSBSS) commenced on 28th March 2024.  Payment rates this year are £105.10 per calf on the mainland and £151.24 per calf on the Scottish Islands.  This compares with £101.42 and £144.47 respectively in 2022.  The higher payment this year reflects the decline in the national herd with the number of calves being claimed declining from 379,740 in 2022 to 366,371 in 2023.  To be eligible for the SSBSS calves must have at keast 75% beef genetics and have been born and kept on the holding for at least 30 days from birth within the calendar year.  

 

The Scottish Government has launched a consultation on banning the use of cages to house laying hens for egg production.  Currently ‘enriched’ cages can be used which offer more room for hens to nest, roost, scratch and rest than the previously used battery cages that were banned across the UK in 2012.  The consultation is asking for views on the phasing out of all types of cages used for egg production.  Responses need to be made by 25th June 2024.  Full details can be found via https://consult.gov.scot/agriculture-and-rural-economy/consultation-use-of-cages-in-laying-hen-sector/.  Although the proportion of eggs coming from enriched systems has been declining as free-range eggs have come to dominate, cage production is still important in the ‘value’ sector and especially foodservice and ingredients.  There is concern that banning this production system will simply lead to greater egg imports.  In addition, although not included within this consultation, a Call for Evidence regarding the use of cages in the Scottish gamebird and quail sectors will be published in the coming months.

Arla Foods is investing £179m over the next three years in its Taw Valley plant to produce and export Mozzarella.  Currently the site, at North Tawton in Devon, produces Cheddar and some territorial cheeses.  But investment at the plant will see Mozzarella being produced and, with the latest technology, this should reduce the cheese maturing process from 14 days to around 24 hours.  Arla Foods executive VP and COO, Peter Giørtz-Carlsen has said ‘our Mozzarella business has seen double-digit growth over the past five years and we have strong relationships with key customers, particularly in global foodservice and it’s from that very solid starting point we are announcing the investment’.  The upgrade is expected to be completed by 2026 and will start delivering its first products by 2027.   Arla Foods has other Mozzarella production sites in Denmark.

The AHDB is forecasting UK pig meat production to only grow marginally, by 0.6%, in 2024 to 933,000 tonnes.  The current tight supply is expected to continue through the first half of 2024.  The latter half of the year is expected to see throughputs improve as the increase in the number of gilts intended for first time breeding recorded in the June 2023 Survey start farrowing.  The clean pig kill is forecast to increase by 0.8% realising 10.14 million head for the year with carcase weights remaining on average at 89kg, similar to 2023.  Looking further ahead, there has been some improvement in farm margins, but uncertainty remains.  The breeding herd is expected to remain at around 340,000 head with limited growth over the next couple of years.

In terms of trade, 2023 was a year of contrasts.  During the first 4 months, imported pig meat volumes were down by 14%.  However since May, improved demand and an increase in the price differential between UK and EU product has seen monthly import volumes recording on average a 5% year-on-year growth.  This is expected to continue through 2024, with imports forecast to be up by 3% on the year.  Exports of pig meat from the UK in 2023 were down by 19% (Jan-Nov) due to lower UK production and higher prices.  For 2024, the AHDB is forecasting a 1% increase in export volumes with some new opportunities developing in the USA and Mexico.  However the EU remains the most important destination and pricing will be key.

In 2023 demand for pork fell.  Total pork volumes declined by 1% year-on-year.  In 2024, pork consumption volumes are forecast to decline further by 2% compared with 2023 and by 4% compared with 2019, due to the continuing cost-of-living crisis and eating out still down on pre-covid 19 levels.

What does this mean for farmgate prices?  UK pig values have been under pressure since last autumn, even so margins have been better as prices are above levels a year ago and input costs have eased.  UK pig prices will follow EU markets, but with supplies tight in both regions, this should help stabilise prices.  The lack of demand is the main bearish factor in markets.  The willingness of the UK consumer to spend will determine whether prices firm through the rest of 2024 or drift downwards.