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QMS (Quality Meat Scotland)

18 April 2012

QMS Market Report - March 2012QMS Market Report - March 2012

Prime cattle prices edged forward during March, posting a new record high and passing 350p/kg dwt for the first time.
QMS - Quality Meat Scotland

Cattle Prices and Supplies

Prime cattle prices edged forward during March, posting a new record high and passing 350p/kg dwt for the first time. Forwards movement in farmgate prices over the past couple of months has occurred despite weak consumer demand; therefore it has clearly been supply-driven. Though auction prices have also edged forward they are yet to pass their 2011 peak and the prime cattle average has stabilised around 198p/kg lwt. Prime cattle are currently 19% more expensive than one year ago.

DEFRA data for slaughterings at UK abattoirs shows that throughputs continued to slide in February compared with last year as 6% fewer prime cattle were slaughtered. In the quarter ending February, average weekly slaughterings were down 7% on the year. Average weekly steer and heifer slaughterings were 5% and 6% lower, respectively, while young bull volumes fell 19% year-on-year over the three-month period.

In Scotland, February slaughterings were also down by 6%. Slaughterings of prime cattle have trailed year earlier levels since the end of August.

Throughputs of mature stock at UK abattoirs have also tightened with numbers down 8.5% on February 2011. Tightening supplies are also reflected in auction market volumes for cull cows. In the first quarter of 2012 (Q1) numbers fell 4.5% year-on-year in England and Wales and by 7.5% in Scotland. Nevertheless, the culling of mature stock remains higher than two years ago.

In addition, there have been far fewer prime cattle killed in Irish abattoirs than at this time last year. Weekly data for February and March indicate that slaughterings have been approximately 20% lower.

Average prices paid for cattle across the EU continued to show stability in March. Irish prices rose 2% during the month and are showing one of the greatest proportionate increases on the year (+21%). Elsewhere in the EU, prices have traded around 12% higher than last March.

UK trade data indicates a sharp slowdown in export volumes during January. Monthly shipments of 8,250t were down by more than 20% when compared with the opening month of 2011 and were at their lowest since May 2010. Though Switzerland purchased 90% more UK beef than a year ago, all other major customers bought significantly less.

Provisional Revenue and Customs trade data for January shows that imports have also made a slow start to the year. At 17,250t, January volumes were at a four-year low and were down 8% on the year. Fresh beef deliveries were down 6% on the year while imports of frozen beef fell by 13%.

The UK’s principal beef supplier, Ireland delivered 12,000t compared with 12,500t in January 2011. Of the other European suppliers France and Germany also delivered less beef, though Holland sent more than a year ago. Brazil and Argentina exported considerably more beef to the UK than in January 2011, but still only sending a combined volume of just 250t. Nevertheless, overall imports from South America were pulled lower by a sharp fall in deliveries from Uruguay.

April 2012

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