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Small Increase in 2013 Prime Cattle Supplies

20 February 2013

ANALYSIS - Higher cattle prices are expected to continue in the UK and around the world through 2013, writes Chris Harris.

Although they will be easing a little, the trend is to continue to rise but not as steeply as they had in 2011 senior analyst at AHDB/EBLEX Market Intelligence, Debbie Butcher, told the Outlook 2013 conference in London.

The rise in prices in the UK came on the back of lower slaughterings and a tight supply in cattle that continued throughout 2012.

Compared to 2011, cattle supplies saw a drop of around five per cent in steers and nearly 10 per cent in heifers compared to rises in 2011. The number of young bulls fell back over the year to the same as 2011.

The UK cattle supply also saw heavier weights because of the weather in the country until about September last year and the difficulties in getting a good finish on the animals.

Cow slaughtering saw a year of two halves with a dip at the beginning and then reaching their highest point post BSE.

High cereal prices had an impact on demand for calves in 2012, with figures indicating registrations of both male and female beef calves were significantly back on year-earlier levels from April onwards.

For the year as a whole, registrations were back one per cent and two per cent respectively. Male dairy calf registrations were higher on the year, largely as a result of a significant increase in the first quarter.

Producers have continued to rationalise their herds, taking into account feed and forage availability and making the most of the continued high cull values.

Beef consumption in the UK was also up last year not only in volumes but also in terms of value, largely because of the higher prices, Ms Butcher said.

She said that spending on beef was robust up by five per cent on 2011 figures reaching more than $2 billion.

The figures for the last cattle census in June 2012 showed dairy cow figures little changes at 1.8 million head, down by just 0.1 per cent.

Ms Butcher said that she expected the figures to be down further when the next census figures taken in December last year are published, because of the increase in cow slaughterings towards the end of the year.

The suckler cow herd stands at 1.7 million, which is a drop of one per cent year on year, but this is expected to come back to where it was in the previous December when the new figures are published.

There is a general decline in the numbers of both dairy and beef cows over 42 months, with the dairy cow numbers dropping by 30,000 head - a drop of three per cent - and the beef cow numbers over 42 months down by 21,000 or two per cent.

The number of calf registrations in the UK is similar to those in 2011, showing just a 0.4 per cent rise to 2.64 million head.

There are expected to be a few more cattle in the under 24 month range available, but in no significant numbers. The six to 12 month age range are expected to have about 20,000 more head and the 12 to 24 month age range about 46,000 more.

"The prime cattle supply is expected to be tight in 2013," said Ms Butcher.

"Cow slaughtering is expected to be lower than in 2012 and 2011 and there will be a tendency to reduce the herds."

She said that while production will be modestly higher, there will be a down turn in the amount of cow beef offset by an increase in prime beef.

"We can expect an increase in imports through an increase in production in Ireland.

Beef exports in 2013 should be able to maintain their share of production.

Ms Butcher added: "There is expected to be a small increase in supply in the UK in 2013 but we do not expected prices to increase. However, high prices are here to stay."

Across the EU, production has changed very little. However, Ireland will see production up by between eight and 10 per cent.

On the global markets the US is showing a decline in production with Argentina, Uruguay, Australia and Brazil all showing increases. Argentina is showing the highest increase at just under six per cent with Uruguay around four per cent Australia three per cent and Brazil two per cent increase.

In all two thirds of the world's production of beef comes from these five countries and any decline in production in the US is expected to be offset by the increases in the other four countries.

Chris Harris

Chris Harris



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