Tag: Pigs

Beef

The UK cattle price has been above year-earlier levels so far throughout 2018.  Similar to 2017, the price fell steadily from the turn of the year until the end of February, since when it has risen through March, April and into May.  As of mid-May the AHDB all steer deadweight weight price was 4.2p per kg more than the price at the turn of the year and 13p per kg more than for the same week in 2017.  Demand is expected to stay ahead of supplies helping to support prices through the summer.  The latest AHDB beef and veal forecasts (see table below) were released in April and see a marginal increase in production (0.4%) for 2018 compared to 2017.  This is mainly due to higher slaughterings of prime cattle, although fewer cows are expected to be culled.  Both imports and exports are forecast to increase slightly, together with a modest 1% rise in domestic demand.  Looking further ahead, lower calf registrations and increased calf losses due to the adverse weather conditions earlier in 2018, could impact on production in 2018 and 2019, but the uncertainty surrounding Britain’s trading relationship with the rest of the EU is likely to impact on herd investment decisions.

Actual and forecast supplies of beef and veal in the UK – source AHDB
000 tonnes	2017	2018 (f)	2019 (f)	2020 (f)
Production	893	897	886	876
Imports	441	460	456	451
Exports	141	153	125	101
Total Consumption	1,194	1,204	1,217	1,226

Lamb

The UK sheep meat price for Old Season Lamb (OSL) has reached record levels in 2018.  Despite a high carry-over from the 2017 crop, lower imports from NZ and increased export demand helped by strong French farmgate prices, has seen UK values rise to unprecedented highs in the first quarter of 2018.  Global markets remain strong, which should help to keep domestic prices elevated over the next few months.  Looking further ahead, the table below shows the latest forecasts from AHDB.  This shows supplies available for consumption to decline sharply in 2018, and again in 2019 and 2020, albeit at a slower rate, mainly as a result of increased exports whilst imports are forecast to decline.  Imports from NZ are expected to remain much lower than historic levels as it concentrates on exports to China and the US.  In contrast exports are forecast to grow by 3% in 2018; all of which should continue to support prices.

Actual and forecast supplies of mutton and lamb in the UK – source AHDB
000 tonnes	2017	2018 (f)	2019 (f)	2020 (f)
Production	297	298	305	296
Imports (a)	95	84	81	83
Exports (a)	94	97	101	98
Total Consumption	298	285	284	280

(a) Carcase weight equivalent and including processed products

Pig Meat

The UK pig price has seen a steady decline since its high of last summer, but is starting to stabilise; whether this can last remains to be seen.  The EU average pig reference price has declined over the past month due to weak demand both domestically and for export.  Over-supply in China is putting pig prices under pressure and this seems likely to remain the case for the rest of 2018.  The UK and EU average reference price has widened over the last month, recording the largest difference since February.  However, it still remains below that calculated throughout the last quarter of 2017.   As domestic productivity is forecast to improve, an increase in demand is required to lift prices.  The table below shows the AHDB’s latest forecasts.

Actual and forecast supplies of pork in the UK – source AHDB
000 tonnes	2017	2018 (f)	2019 (f)	2020 (f)
Production	905	931	958	983
Imports	1,075	1,060	1,051	1,053
Exports	264	278	291	304
Total Consumption	1,716	1,712	1,718	1,733

DEFRA has released its latest statistics on Livestock Populations as at 1st December 2017 for the UK.  The total number of cattle and calves has remained similar to earlier levels at 9.8 million head; just a 0.2% decline.  The dairy breeding herd has increased marginally, by 0.3%, to just over 1.9 million.  However the number of dairy cattle aged between 1 and 2 years is down by 6.1% which will have an impact on replacements entering the herd.  Dependent on what milk prices do going forward, we could see a contraction in the herd.

Total beef supplies in the UK were forecast to be higher in 2018 through the availability of more clean cattle slaughterings.  The December survey results support this to a degree, with female beef cattle numbers aged between 1 and 2 years up by 3.1%.  However male cattle between 1 and 2 years of age are down by 1.4%, which may see 2018 production forecasts still higher than 2017, but not by as much as originally expected.

For sheep, the UK female breeding flock has increased marginally, by 0.1% to 14.7 million head, the largest flock size since 2007.  This should mean a large lamb crop in 2018.  However, the AHDB is forecasting a decline in the lamb rearing rate compared to 2017, although still high compared with previous years.  Other sheep and lamb numbers are down by 4.2% on the year, but this is still historically high.  Finished lamb prices have been strong ahead of the Easter market, some 40 to 50p per kg liveweight more than last year.  The deadweight Old Season Lamb (OSL) SQQ broke through the £5 per kg barrier in the first week of March and stands at £511.2p per kg for the week ending 17th March, some 117p per kg more than for the same week in 2017.

The total number of pigs has increased by 3.9% to 4.7 million.  This is mainly due to the number of fattening pigs on farm which has increased by 4.4% compared to year earlier levels.  These figures support the continuing rise in production we are seeing, which is putting downward pressure on prices.  Supplies for the week ending 17th March were 16% above 2017 levels, according to the AHDB.  After two weeks of relative stability, prices fell on the week.  The UK-spec SPP stood at 142.73p per kg for the week ending 17th March, around 6 p per kg less that year earlier levels.

 

Cattle

Prime cattle prices saw a rise in November as processors geared up for the Christmas procurement period.  There was a drop at the beginning of December, after which prices remained steady for the rest of the month.  January, however, has seen deadweight prices fall quite sharply week-on-week; even so they are still above the previous year’s.  For the week ending 20th January the average deadweight all steer price stood at 358.8p per kg, some 2.3p per kg lower on the week but still 8p per kg better than a year earlier.  Estimated slaughterings are up by 4.3% on the week.  Supply is said to currently be ahead of demand putting pressure on prices.  Prime beef supplies in 2018 are forecast to be higher than 2017, which unless demand also rises we could see prices ease further.

In contrast to prime cattle, prices for cull cows have seen a week-on-week increase.  The all-cow price for the week ending 20th January is 240p per kg, some 23.2p per kg more than the same week in 2017.  This could just be a ‘blip’, but demand for manufacturing beef remains strong both domestically and on the continent and should therefore help to support the price.

Sheep

The deadweight lamb price has started the year well, with the average SQQ for the week ending 20th January standing at 413p per kg, some 2.2p per kg up on the week and 34.1p per kg higher than for the same week last year.  In 2017, prices fell throughout January, where as this year the lamb price started the year higher and has steadily increased throughout the month.  Slaughterings are also estimated to be ahead of last year, suggesting demand for sheep meat is currently strong.

Revised Slaughter Figures

According to the latest DEFRA figures, year-on-year UK beef and veal production was down by 5% in December, to 68,000 tonnes.  This brings the total beef and veal production for 2017 to 901,600 tonnes, a decrease of 1% compared to year earlier levels.  However the reduction was expected to be more significant, but in DEFRA’s latest statistical release it has revised the production upwards for each of the months from August to November, a total increase of 8%.  And, with an 18% drop in production between November and December, and a 5% year-on-year fall, it is possible the December figures could also see a revision upwards.

A similar revision has also been made to the sheep meat figures.  If we look at the number of lambs slaughtered, this sees the numbers between August and November increasing by 10% in the latest release.  Meaning the carry over of lambs into 2018, although still significant, it is not quite as much as first thought.

Pig Meat

2017 proved to be an exceptional year for pig producers.  After a number of years of poor prices the SPP reached a historic high of 164.75p per kg in July, with record margins margins also being achieved in quarter 3.  But price rises were due in the main, to a fall in supply, both domestically and across the EU and not due to an increase in demand.  Consequently as supplies have increased in the second half of the year, prices have also fallen.  In addition, AHDB forecasts, domestic production to continue to rise in 2018 and we may also see a recovery in the EU.  If this is the case, similar to beef, an increase in demand will be required to support prices during the coming year.

For the week ending 20th January, the EU-spec SPP halted its 21 weeks of declining pig prices, by climbing (marginally) by 0.03p per kg.  But with ample supplies it seems unlikely that this ‘stabilisation’ will remain for any length of time.