LMC: Prices Holding Up, Volumes Under Pressure
NORTHERN IRELAND, UK - In the latest four-week retail report from Kantar, it is reported that demand for beef, lamb and pork in Great Britain (GB) was under pressure relative to the same period last year. However, with higher
prices, expenditure on all of these meats was
stronger year-on-year according to Kantar.
Demand and supply theory suggests that
reduced supply will lead to higher prices and
consequently reduced demand until market
equilibrium is restored. This certainly appears to
be reflected in the beef market over the course
of the last year.
Higher farmgate prices (see Table 1 March
Snapshot adjacent) are now being passed onto
the consumer with a 12 per cent increase in
retail beef prices in the four weeks ending 18
March compared to the same period last year.
During that period in 2011, the retail beef price
averaged £6.00/kg in GB according to Kantar’s
data. In the four week period ending 18 March
2012, corresponding prices averaged 80p/kg
more. It is worth noting by way of comparison,
that average prime cattle prices in Northern
Ireland increased by 50p/kg over the same
period (see table 1 adjacent).
GB remains the largest market for Northern Ireland (NI) beef and it
is a concern that in the four weeks ending 18
March 2012, retail beef volume sales are down
seven per cent year-on-year. However, first and
foremost this decline has to be seen in the
context of reduced supplies of beef from the
home market. Throughput at the factories in NI,
GB and ROI has been much reduced since the
start of the year and in this respect is no surprise
that retail volume sales are under pressure and
perhaps it lessens the concern at this decline.
In the four weeks ending 18 March beef stewing
sales fell sharply, with volumes down by 14 per
cent year-on-year. Beef frying and grilling sales
were down 10 per cent with sales of roasting
joints down by nine per cent compared to the
corresponding period last year. With the tough
economic environment, it is perhaps no surprise
that of all cuts, mince sales are holding up the
best. However, mince volumes were still down
three per cent year-on-year in the four weeks
ending 18 March 2012.
Higher retail prices leading to reduced volume
sales may be a concern, but it is very reassuring
that consumer expenditure on beef is holding
up. Beef expenditure was up by four per cent in
the four weeks ending 18 March. However, the
rate of increase was slightly slower than that for
the last year.
Looking at the data for the entire year ending 18
March, consumer expenditure on beef was up
five per cent. Despite a five per cent increase in
price, volume demand did not change at all yearon-year. In the 12 weeks at the end of that
period, a 12 per cent increase in price led to a
four per cent decline in volumes and
consequently expenditure increased by seven
per cent. The rate of increase in expenditure
appears to have slowed in the four weeks ending
18 March 2012. Nonetheless, it remains
encouraging that retail expenditure in the sector
continues to grow.
Lamb sales holding up well compared to 2011
Lamb volumes have been under serious
pressure over last year in particular with sales
down 16 per cent. The latest data from Kantar
shows that demand may be stabilising however.
In the four weeks ending 18 March 2012, the
average retail price of lamb was up by five per
cent year-on-year compared to the same period
in 2011. Despite this however, volume sales of
lamb were only down by one per cent year-onyear meaning that expenditure on lamb in GB
during that period was up by three per cent.
Lamb leg roasting (+22 per cent) and stewing (+6 per cent)
sales were particularly strong during that period.
However, sales of lamb roasting (-19 per cent), mince (-
15 per cent) and chops (-13 per cent) were under pressure.
However, the fact that overall sales held up
reasonably well along with expenditure is
positive, particularly since GB is a key lamb
market for the NI industry along with France.
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