Meat Market Update April 24, 2014 12:00 am Cattle Beef prices in the UK have seen a steady decline since October 2013. The expected upturn over the Christmas period did not materialise and the market remains subdued. Levels are currently below year-earlier prices. Looking forward, production in the UK is not expected to be much different from last year, but with the horsemeat scandal, which actually helped British produce, now fading from consumer’s memories, imports could be a big factor. Irish production is forecast to increase and exports from Poland may indirectly affect domestic prices through exporting to some of Ireland’s traditional markets. With imports a more important issue, the exchange rate between the Pound and Euro will be key to future prices. Spring calf sales have been encouraging, showing signs of confidence in the sector; this suggests that many finishers believe the current lacklustre prices are a blip. Cheaper grain is giving a boost to margins. On the flip side cheap grain also means stronger price competition from poultry meat. With consumers continuing to feel the pinch, relatively expensive beef has been priced-out of shopping baskets. If the UK economic situation continues to improve then the demand for beef may well increase. Lamb Prices have remained steady over the winter months. Similar to beef prices no uplift was seen over the Christmas period, but prices did not fall away as was the case last year. Markets have strengthened over the last few weeks with the run up to Easter, although old season lamb, in contrast to new, fell during the last week before the break. It remains to be seen whether prices bounce back as processors look to restock after the holiday period. Looking forward to this season’s crop, the weather has been more favourable than last year and pastures are better; earlier lambing flocks appear to have performed well, but there has been mixed reports regarding the later lambing flocks. Production in the UK is expected to be down in the 1st half of 2014 compared to the previous year due to a lower carry-over of stock. But as the year progresses, supplies should increase as the 2014 lamb crop comes to market. Even so sheep meat availability in 2014 is expected to continue to be tight. This is a consequence of domestic and global supplies. Production in New Zealand, Australia and Ireland are all expected to be lower than year earlier levels. The AHDB forecasts UK imports to be 11% lower than in 2013. Prices should remain above year earlier levels as long as consumer demand holds up. Pigs Pig prices in the UK have fallen since the turn of the year. This is not uncommon, prices generally follow a seasonal decline in the first couple of months of the year. However, UK pig values have come under further pressure due to EU prices falling following Russia’s ban on imports of pork from the EU in the wake of an outbreak of African Swine Fever (ASF). Looking ahead, the EU Commission’s working group on pig meat is expecting supplies to tighten further in 2014 with most of the EU major producing countries forecasting a decline in production. On the back of this EU prices are expected to improve, even without the Russian market re-opening. UK prices trade at a premium to EU prices. Currently this premium is high, and an increase in EU values may simply see the gap narrow and not move domestic prices greatly. Costs of production have crept up again as cereal and oilseed prices have risen due in part to the unrest in the Ukraine resulting in producer’s margins becoming tight again. A good global harvest should help margins
