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AHDB Cattle and Sheep Weekly

14 October 2013

EBLEX Cattle Weekly - 11 October 2013EBLEX Cattle Weekly - 11 October 2013

Prime cattle trade strengthens

In week ended 5 October, bucking the level trend of the past fortnight, the deadweight GB all prime cattle indicator strengthened 2p on the week to average 395.6p/kg. AHDB/EBLEX estimates that supplies forward were marginally behind last week’s. With the forecast that the milder weather may be coming to an end and an improvement in consumer demand may follow, the supply/demand balance appears to have tipped in favour of producers. At the moment supplies of grass-fed cattle are still reported to be adequate for processor requirements, which has been keeping a lid on the upwards pressure on price. However, they are likely to dry up relatively quickly. Combined with the seasonal uplift in demand on the horizon, this may result in upwards pressure on price asserting itself.

With an increase in cow beef supplies, both domestically and on the continent, resulting in supply being ahead of demand, prices fell back on the week. Going forward, trade could be subdued as numbers come forward in greater numbers ahead of housing, in particular throughout Eastern Europe where winter tends to arrive a little earlier. However, as with prime cattle, this could be offset by the upturn in demand as the season heads towards the Christmas procurement period.

The prospects of cheaper grain could give finishers some confidence as the late autumn store cattle sales continue. Currently there is a wider differential between the buying and selling price compared with the previous three years. However, producers will be looking to re-balance cash flow after the expensive 2012/13 feeding season.

Weather impacts on cattle numbers

Results of the June Agricultural Surveys have been so far published for England, Northern Ireland and Scotland and are available on the EBLEX website. Given that these regions together account for the bulk of the UK cattle herd the figures give a good indication of the likely position of the UK herd. Of significant implication for production of beef in the UK, the suckler herd is reported to have declined in all three regions. This reflects the on-going concerns over profitability, compounded by the long winter and poor spring. In addition, with producers in Wales likely to have been amongst the most affected by the poor weather, the expectation is that the Welsh suckler breeding herd will also not demonstrate any recovery. On the back of these results, revised forecasts for UK supplies will be released at the end of October in the Cattle and Sheep Market Update. To subscribe please email [email protected].

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