Meat Market 2013

Beef

As the farmgate beef price continues at record levels, the AHDB/EBLEX has released its 2013 forecasts for the UK cattle sector.  Supplies available for domestic consumption are predicted to be just under 2% higher in 2013 than in 2012 as a small increase in production and exports is offset by an increase in imports.

Prime cattle slaughterings in the UK were lower in 2012 compared to 2010 and 2011 levels.  EBLEX has forecast only a small increase in production for 2013 by less than 1% to 887,000 tonnes.  There was an increase in calf registrations, mainly male dairy calves, at the end of 2011 and the start of 2012, but significantly, for the future of quality beef production, male and female beef calf registrations were down 1% and 2% respectively in 2012.  Cow and adult bull slaughterings fell by 1% to 636,000 in 2012 compared to year earlier levels, although 2011 was the highest since BSE.  Cow slaughterings are forecast to drop by 4.4% in 2013 due to a younger and fitter herd, to 608,000 head although this is still historically high; in 2009 only 497,000 cattle were culled.

Exports are forecast to increase by 2% with imports up by 4.5%.  There is ongoing demand for cow beef on the continent, but this could be affected by exchange rate fluctuations and problems in the Eurozone.  The increase in imports is mainly due to the expected upturn in production in Ireland.  Imports from South America are forecast to remain low as these countries continue to exploit markets outside of Europe.

Sheep

Over recent weeks the sheep trade has picked-up, probably more as a result of the favourable exchange rate rather than anything else.  The sector has been dogged with ‘cheap’ New Zealand imports, terrible weather and disease concerns through 2012. 

EBLEX/AHDB forecasts that sheepmeat production will rise by 8% this year compared with last.  But this will mainly be due to the large carry over from 2012.  The terrible weather in 2012 disrupted marketing.  More lambs were recorded on farm in the June Census but with slaughter numbers down during the second half of the year these extra lambs are expected to come forward during the first half of 2013.  As for the second half of the year, it is assumed that there will be some return to ‘normality’ so that slaughter patterns and carcase weights are more ‘normal’ in nature

On the back of a good couple of years the breeding flock was expected to reach 15 million head in the December survey, but with the drop in lamb price, confidence in the industry has been hit and EBLEX now forecast breeding numbers to still increase, but by a lesser extent, to 14.9 million in 2013.   (However, this seems optimistic given the results of the December Survey above).   The poor weather compounded by higher disease rates, including the Schmallenberg virus is expected to lead to a lower lambing rate compared to 2012, but due to an increase in breeding numbers the overall lamb crop for 2013 is forecast to be similar to 2012.

Imports in 2012 were actually lower than in 2011, but there was a significant increase in shipments to the UK in the second half of 2012 especially from New Zealand which had an impact on prices. Production in New Zealand has increased and imports are expected to rise again in 2013, although they are still below pre-2010 levels.  Export volumes are expected to bounce back in 2013 after falling in 2012.  Export volumes are usually in the region of one third of total production and as domestic production increases export availability is expected to also improve.  Again, currency will be key. 

All this suggest some bearish pressure on prices although it is hoped that values in the crucial autumn selling period will be better than those seen in 2012 if a more normal weather year is experienced.