Meat Markets

Beef

Since the low point in July, when the all steer deadweight price fell to 326.9p per kg, the farmgate beef price has been steadily improving.  The AHDB average GB deadweight price for all steers for the week ending 6^th December was 355.5p per kg and all heifers was slightly higher at 358.2p per kg.  These are the highest prices seen since back in April, but are still 30p per kg less than at the same time last year, when prices had already started to fall.  The current market appears to be firm; even with more cattle being marketed the price is edging higher.  However, reports suggest Christmas orders are now getting filled up which could have a negative impact on prices, especially into the New Year.  But supplies are expected to tighten and it is also possible that some cattle destined to be marketed in 2015 have been finished and marketed earlier, as a consequence of a good summer and cheaper grain.

On the demand side, the latest Kantar Worldpanel data for the three months to 9^th November show beef purchases have been steadily increasing, but even so beef sales are still below last year.  Price conscious consumers continue to switch from relatively high priced beef to pork and chicken which have fallen in price over the year.  Even though the farmgate price of beef is lower compared to 2013, mince is the only beef product not to record a year-on-year increase in the average retail price.

Lamb

Having been below last year’s levels since July, it looks like the deadweight SQQ will end the year above 2013 values.  The latest report for 6^th December shows the SQQ at 409.3p per kg.  The price has risen by nearly 50p per kg since the start of November.  This is the first time for a couple of years that the price has risen in the run up to Christmas.

Meanwhile lamb sales have been down for much of the year compared to 2013.  Latest Kantar Worldpanel data for the last three months to 9^th November reveals consumers bought 12% less lamb than in the same period a year earlier.  This year not only have supplies from New Zealand been lower, but the value has been higher, impacting on the retail price.  This is obviously helping farmgate prices at the present time, but whether this can continue remains to be seen.  Demand continues to decline and if supply increases significantly this could have a negative impact.  With a better crop of lambs this year and Census results backing this up, the number of lambs coming to the market was expected to be higher than it has been.  This means some additional animals look like being carried over in to next year, this could have a downward effect on the spring market, although over the last few years this has seen a strong trade.

Pigs

The pig price continues to fall.  The EU-Spec GB SPP has fallen for nine consecutive weeks and stands at 144.65p per kg for the week ending 6^th December.  Estimated weekly slaughterings have increased for the seventh consecutive week and were 4% up on year earlier levels at thebeginning of December.  At these prices many producers will be close to their break-even point or losing money; for the first time since spring 2013.

The annual report on Pig Cost of Production in Selected Countries has been released.  The figures are based on analysis by InterPIG, an international group of pig economists covering the major EU pig producing countries together with Brazil, Canada and the US.  It shows the performance of the British pig herd is improving.  The number of pigs weaned per sow per year rose by 4% in GB to 23.63.  Whereas the average for the European IntePIG countries only showed a 3% increase, however their production is already a lot higher than GB at 26.06 pigs per sow per year with Denmark achieving 30 for the first time.  GB actually has one of the the lowest amongst the InterPIG members, with only Italy (23.60) and Canada having less (22.95).  The full report can be found at: http://www.bpex.org.uk/downloads/304053/303991/2013%20Pig%20Cost%20of%20Production%20in%20Selected%20Countries.pdf