Category: Dairy & Livestock

According to the AHDB the spring flush passed with a ‘whimper’.  GB daily milk deliveries recorded a downturn in the week ending 11th May.  The highest daily figure was recorded at 36.92m litres on 8th May (although this figure is still subject to revision).  Delivery data from the AHDB for 1st-11th May shows production was back 2.1% compared with 2023, which was itself a ‘subdued’ year.  Cumulative deliveries are already 2.9% below the AHDB’s forecast it made in March; this will be revisited in June.  Looking ahead, although grass growth is good now, the wet weather through autumn, winter and spring is likely to have caused longer term damage to the ground and grass quality.

The picture is similar at a global level.  Reported milk deliveries in the latest period (February) averaged 813 million litres per day, down by 0.4% (5.5m litres per day) compared with the same period last year.  Australia and New Zealand both recorded a year-on-year increase, but Argentina, the US and UK all exeperienced a fall in production.  Deliveries in the EU were said to be stable; significant declines in Ireland, down 13.3% on the year, have been compensated by growth in Germany, France and Poland.

Although the warning signs have been there, it appears the commodity markets have finally woken up to the fact that production has been constrained, with butter prices experiencing siginificant recent rises and cheese starting to follow.  The GDT average index has also risen at both events held in May by 1.8% and 3.3% to average $3,861.  Notable movers include:

• Butter           +5.1% to $6,931
• SMP              +3.5% to $2,629
• WMP            +2.9% to $3,408

At farmgate level, there is also an upward trend in UK milk prices, with some increases for June having already been announced;

• Suppliers to Muller will receive a 0.5ppl increase for those who meet the conditions for Muller Advantage
• Freshways has announced a 2ppl increase from 1st June, taking its standard litre to 37ppl
• Barbers has announced a further 1.02ppl increase, the 5th increase this year, which takes its standard litre to 39.15ppl

The only air of caution is Rabobank’s forecast for Chinese import demand which has been revised down to -8%.  Stronger domestic production and weaker demand is behind these updated figures.  Only 0.6% of UK British dairy exports went to China in 2023.  However, New Zealand, China’s biggest supplier will have a lot of displaced product which will need to go somewhere.

Defra has increased the grant available under the Smaller Abattoir Fund.  The fund, which opened in December, supports the purchase of a diverse range of capital investments and equipment.  Defra has confirmed the grant rate has increased from 40% to 50% and the maximum grant amount has been raised from £60,000 to £75,000.  To maximise the ability to access the fund, applicants are also able to make up to three separate applications throughout the application window, up to the maximum of £75,000.  The minimum grant amount remains the same at £2,000.  Our article of 15th December 2023 gives further details of the fund  (see https://abcbooks.co.uk/smaller-abattoir-fund/), which will now close on 30th September 2024.

Defra has released guidance for the first round of the Laying Hen Housing for Health and Welfare Grant.  This new grant is part of the Farming Investment Fund (FIF) and will provide suport to either;

• replace or upgrade hen or pullet housing – a ‘Comprehensive’ project; or
• add a veranda onto exising laying hen or pullet housing – a ‘Veranda-only’ project

Similar to other grants available under the FIF, there will be an online checker which is expected to be available from the end of June.  Successful projects will need to show;

• improved laying hen and pullet health and welfare
• increased environmental sustainability
• innovation

The project must show a high level of biosecurity, an excellent ambient environment, and maximise the space available.  Comprehensive projects for both pullets and laying hens should include mechanical ventilation and high welfare multi-tier systems (defined as aviaries for laying hens).  Any laying hen housing should include a veranda, where outside space is permitted.  Eligible applicants for Veranda-only projects will be invited to make a full application from July 2024.  Eligible applicants for Comprehensive projects will be invited to make a full application from October 2024.

The full guidance can be found at https://www.gov.uk/government/publications/laying-hen-housing-for-health-and-welfare-grant-round-1 .

A case of Bovine Spongiform Encephalopathy (BSE) has been confirmed in Ayrshire.  The Animal Plant and Health Agency (APHA) is investigating the source of the outbreak and have placed movement restrictions at the farm where the animal was located and at a further three farms which includes the farm where the animal originated from and two more holdings where animals have had access to the same feed.  Food Standards Scotland have said the case was identified as a result of routine surveillance and stringent control measures –  all animals over four years of age that die on farm are routinely tested for BSE.  The animal did not enter the human food chain.  And although the disease is not directly transmitted from animal to animal, its cohorts and offspring have been traced and isolated and they will be destroyed in line with legal requirements.

The APHA has confirmed that there is a ‘very high probability’ of a new introduction of bluetongue virus serotype 3 (BTV-3) into livestock in Great Britain.  This will be through infected biting midges coming over from northern Europe.  These midges are most active between April and November but it will depend on the temperature and wind patterns as to when the risk is greatest.  Readers will recall last November, APHA and The Pirbright Institute identified the first case of the disease in Great Britain through the annual Bluetongue Surveillance Programme.  Since then, there have been 126 bluetongue cases confirmed in England across 73 premises in four counties, with the last case confirmed on the 8th March 2024.  All cases confirmed to date have been detected through active surveillance, with the animals likely to have been infected back in late autumn.

Due to their proximity to areas in northern Europe where BTV-3 is actively being transmitted by the biting midge population and wind patterns, counties along the south and east coasts of England, including Norfolk, Suffolk, Essex, Kent, and Sussex, are considered most likely to be impacted.  APHA has said, once the risk of transmission increases, it will be offering free bluetongue tests to keepers in these high-risk counties.

Bluetongue virus affects cattle, sheep, and other ruminants such as goats and deer, and camelids such as llamas.  However, the virus does not affect people or food safety.  The impacts on infected animals can vary greatly depending on the species of animal and the strain of bluetongue virus – some show no symptoms, while for others it can cause productivity issues such as reduced milk yield or, in the most severe cases, it can be fatal.

Currently there are no authorised vaccines available for BTV-3 in the UK or Europe, but the Government is ‘actively engaging with vaccine manufacturers’ on the development of a vaccine for use in the UK.  There is a vaccine approved by the Dutch authorities which has emergency use approval but not market authorisation. Vaccines without market authorisation can have potentially negative implications for trade and may impact the ability to export meat and dairy products to some trading partners.  APHA has said it is ‘actively monitoring vaccine data from EU countries and will continue to work with the industry on any decisions on use of a deployable vaccine’.

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/.