2015 Meat Market February 26, 2015 12:00 am Following the AHDB’s annual conference in February, it has released its latest forecasts for 2015 and 2016. Beef Ascan be seen from the table below, 2014 saw higher domestic production and increased imports which resulted in a negative impact on farmgate prices for parts of the year. But lower production in 2015 could help producer prices. Looking ahead, prime cattle supplies in the UK are forecast to tighten in 2015. The beef breeding herd has been steadily declining reflecting the low profitability in the sector. In contrast the UK’s dairy breeding herd actually saw an increase in numbers in 2014, a reflection the confidence in the industry during the first half of the year. However, recent problems in the industry could alter this and it is possible culling rates could increase in the months ahead. Figures from the British Cattle Movement Service (BCMS) show a decline in the registered calf births in 2013 by 81,000 head compared to 2012, which will impact on production during 2015. Prime cattle slaughterings are forecast to be back by 2%. Last year, total domestic production was up by about 4% as better conditions resulted in carcase weights for all categories (except young bulls) being higher for the year. With good quality and quantity of forage this year and lower feed prices, carcase weights could remain at levels seen in 2014 and ,therefore, domestic production is expected to fall in line with slaughter numbers, by about 2%. In addition import volumes are forecast to drop, mainly due to a fall in Irish production. Although Irish cattle are likely to trade at lower prices to those in the UK. In contrast, exports are forecast to increase. Ireland and the Netherlands are the UK’s two main export markets, with both increasing, but other smaller markets are developing too including Italy, Greece, Spain, Germany and Denmark. Exports are also increasing to further afield markets such as Hong Kong. EBLEX is also trying to ensure the domestic industry is ready if an agreement is reached between the UK and US for beef (and lamb). The US market has recently opened to Irish beef and it is anticipated there could be an official visit in early 2015. UK BEEF &VEAL and SHEEPMEAT BALANCE – Source: AHDB/DEFRA BEEF AND VEAL SHEEPMEAT ‘000 tonnes 2013 2014 2015* 2016* 2013 2014 2015* 2016* Production 848 878 860 850 289 298 309 309 Imports 389 410 388 385 116 108 110 111 Exports 131 141 146 145 109 108 111 112 Total Consumption 1,106 1,146 1,100 1,090 296 299 308 308 Forecasts in italics Sheep Meat Sheep meat available for consumption is forecast to rise again in 2015 and could top 300,000 tonnes for the first time since 2009, a 4% increase. EBLEX is forecasting both lamb and adult sheep slaughterings to increase. The lamb crop in 2014 was the largest since 2006 and this is expected to be similar for the 2015 season, always dependent on the weather conditions though. With the large lamb crop last year, slaughterings are forecast to remain above year earlier levels for the remainder of the current season. The first quarter in 2015 is expected to see high inputs, with a large carryover from 2014 and Easter falling early this year. Adult sheep slaughterings fell by 13% in 2014 compared to the previous year and this is expected to reverse in 2015. With a slightly larger and older breeding flock and assuming normal weather conditions, throughput is expected to increase by 11% compared to year earlier levels. Imports and exports are forecast to remain pretty much in balance. Exports are forecast to increase marginally in line with production. The global supply situation is expected to remain tight and as a result imports aren’t forecast to change much, a small rise could be seen in the early part of 2015. Domestic production is again going to be the key driver of supplies and as can be seen from the table above, the amount of sheep meat available for consumption is forecast to rise by 3% this year, meaning an increase in consumer demand is required to prevent downward pressure on farmgate prices. Pig Meat Pig meat production is forecast to go over 900,000 tonnes in 2016, for the first time since 2000. A rise in slaughterings over the next two years is expected to drive production. Going forward the UK breeding herd is expected to remain fairly stable. Over the last five years, UK sow productivity has improved steadily, ending 2014 at about 24 pigs per sow per year. However, other EU producers achieve much higher productivity, allowing room for continued improvement. For 2015 slaughterings are expected to increase by around 3% to just under 10.5 million head. This would be the highest since before the 2001 FMD outbreak, although still much lower than levels back in the 1990s. UK prices have always tended to trade at a premium to EU prices, but over the last year this gap has reached record levels. This suggests UK buyers have remained loyal to sourcing UK products. Unless this changes, imports are expected to remain stable and even reduce in 2016 if EU production declines due to poor profitability. Exports are forecast to increase, but these may have to be at lower prices. UK PIGMEAT BALANCE – Source: AHDB/DEFRA ‘000 tonnes 2013 2014 2015 2016 Qtr1 Qtr2 Qtr3 Qtr4 Year Production 833 862 218 213 222 234 887 909 Imports 927 943 228 236 237 246 947 935 Exports 229 239 60 60 60 65 245 250 Total Consumption 1,532 1,566 386 389 399 415 1,589 1,594 Carcase weight equivalent. Forecasts in italics Similar to the sheep sector, pigmeat available for consumption is expected to rise by 3% and a further 2% over the next couple of years. Therefore unless consumer demand also increases farmgate prices are likely to feel the pressure.
