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AHDB Cattle and Sheep Weekly

19 August 2013

EBLEX Cattle Weekly - 16 August 2013EBLEX Cattle Weekly - 16 August 2013

Cull cow trade drops below 2012 levels

Reports suggest that disappointing retail demand led to the GB all prime cattle indicator dropping nearly 6p on the week to average 385.0p/kg in week ended 10 August. This fall, combined with the steady decline witnessed since prices peaked in early July, has resulted in prices dipping to their lowest level since March. Although purchases of forequarter beef and steaks soared in the hot weather, sales of the more expensive cuts such as roasting joints have taken a backward step. Despite this, the R4L steer price remains around the 400p/kg mark, up almost 50p on the previous year. However, supplies are still fundamentally tight, so if consumers resume their usual purchasing habits postholiday season, upwards pressure on price could resume.

The cow beef trade is still feeling the implications of the excess supplies of cheap Polish prime beef on the European market. Throughout the year so far, cull cow prices have been consistently above 2012 levels. However, in week ending 10 August, following a sharp 8p/kg drop on the week, the all cow average price fell below year earlier levels. This is despite an estimated 10% drop in slaughterings in the past fortnight compared to the corresponding period a year earlier. The downward pressure on price may be further explained by subdued export demand on the Continent during the holiday period.

Producer share of retail price increases

The latest farm to retail price spread is now available on the EBLEX website. The measure indicates that, in July, with little change in both average farmgate and retail prices, the producer share of the retail price was broadly unchanged compared to the month before. Overall the producer received 59% of the final retail price. With farmgate prices having increased nearly 10% throughout 2013 so far, this represents some improvement on earlier in the year and a significant increase on the distribution in July 2012.

Fewer non-dairy calf registrations so far in 2013 indicate that beef supply to remain tight

Recent data from the British Cattle Movement Service indicate that in the first six months of this year calf registrations in GB were almost 5% lower than in a year earlier. With two thirds of calves registered as nondairy animals, the downward trend has particular implications for future production of high quality beef and signals that cattle availability in the medium term is not going to increase. Further analysis of the half year position is available on the EBLEX website.

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