LMC: Food Price Decreasing as Costs Rise

UK - The latest Food and Agriculture Organisation (FAO) Food Price Index has just been published and indicates that in 2012 to date food prices have been an average of eight per cent cheaper than the same ten month period in 2011.
calendar icon 20 November 2012
clock icon 5 minute read

The FAO price index for meat for the month of October 2012 has remained the same as September 2012 at 174 points and is down slightly from the 176 points recorded in October 2011.

At a producer level this means that on a global basis the average retail price of meat products has not changed over the course of the year while the cost of the cereals utilised in meat production have markedly increased. The FAO cereal price index in October 2012 was 259 points, a decrease of 4 points on the previous month but 18 index points higher than the figure in October 2011. This represents an increase in cereal costs by twelve per cent over the course of the year.

Classification Analysis

A N analysis of the prime cattle classification statistics for price reported cattle for the six month period May-October 2012 have identified some interesting trends when compared to the same period in 2011. It should be noted that the proportion of steers, heifers and young bulls in the prime kill was unchanged between the two periods.

The average carcase weight for suckler origin prime cattle for the period May-October 2012, was 355.7kg. This is 7.2kg heavier than the 348.5kg average carcase weight during the same period in 2011. However if we were to look only at the five major continental beef breeds (Limousin, Charolais, Simmental, Blonde d'Aquitaine and Belgian Blue), which account for 75 per cent of all beef sired calf registrations, then the difference in carcase weights of suckler sourced prime cattle between the two periods is 8.2kg with an average carcase weight in the 2012 period of 363.6kg.

Alongside this increase in the carcase weights of prime cattle sourced from the suckler herd there has been a general upward movement in carcase grades as indicated in Figure 2. Table 1 outlines the proportion of prime cattle produced from the suckler herd that fall within each base grade during the period May-October 2012 compared to the same period in 2011.

The general improvement in the grades of cattle produced from the suckler herd has led to a decline in the proportion of R grading animals between the two periods while the proportion of U grading animals has increased.

The proportion of these prime cattle achieving a U grade has increased from 21.5 per cent in May-October 2011 to 25.0 per cent in the same period in 2012.

Meanwhile the proportion of R grading cattle has declined slightly from 54.5 per cent in May-October 2011 to 51.9 per cent in May-October 2012. This is most likely a consequence of prime cattle being pushed into heavier weights and thus helping to move them up a grading sub class i.e. from an R+ to a U-.

Weekly Beef Markets

Dead Weight Cattle Trade

Base quotes from the plants this week for U-3 grade prime cattle have increased to 320-324p/kg with the plants reporting a tightening in the supply of prime cattle.

The weekly prime cattle kill has been gradually reducing since early October and last week totalled 6,559 head. Meanwhile the cow kill has remained strong with 2,783 head slaughtered last week and the plants reporting plenty of availability. The quotes for first quality cows range from 260-275p/kg.

Imports of prime cattle from ROI for direct slaughter have remained strong with 915 prime cattle imported last week, accounting for fourteen per cent of the total prime kill.

Exports to GB

Meanwhile exports to GB for direct slaughter have remained similar to the previous week with 315 cattle being exported. The average steer price in NI last week increased by 4.2 p/kg to 316.2p/kg while the heifer price increased by 2.7p/kg to 318.0p/kg.

These prices are similar to the same week last year when average steer and heifer prices were 316.9p/kg and 317.8p/kg respectively. Young bull prices in NI last week increased by 5.4p/kg to 308.9p/kg. This is 2p/kg higher than the 306.9p/kg paid the same week last year.


In Scotland last week average steer prices were similar to the previous week at 361.5p/kg while heifer prices increased by 1p/kg to 358.7p/kg. An improvement in price for the largest majority of reported grades in the other UK regions has resulted in stronger increases in average prices being observed with steer and heifer prices up in the range of 2-6p/kg. The differential in the R3 steer price between NI and the GB average last week was 29.2p/kg. This ranged from 20.6p/kg in Southern England and generally increases as you move north to 34.1p/kg in Scotland.

Republic Of Ireland

In ROI last week the prices paid generally increased in euro terms with R3 steers and heifers up 3.4c/kg and 4.9c/kg respectively. However a slight weakening in the euro against sterling meant prices were relatively unchanged in sterling terms. The differential between NI and ROI for R3 steers last week was 28.3p/kg while the differential for R3 grading heifers was 16.1p/kg.

Finished Marts

Finished first quality steers sold to an average of 195p/kg this week with second quality finished steers selling to an average of 176p/kg. This was a similar trade to last week. Good quality finished heifers sold to an average of 205p/kg compared to 187p/kg last week with plainer finished heifers selling to 178p/kg (+8p/kg).

Beef cows sold to an average of 163p/kg for first quality lots and 133 for less well fleshed cows. The trade for dairy type cows was fairly similar to the previous week, selling in the range of 90-135p/kg. The trade for store bullocks up to 400kg was similar to last week with good quality animals selling to an average of 194p/kg with second quality animals selling to 168p/kg. The trade for first quality store heifers was similar to last week with average prices for second quality animals showing increases in the region of 5-8p/kg.

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