Category: Dairy & Livestock

Beef

The prime beef farmgate price has been on an upward trajectory since July.  The GB deadweight all-steer price has risen by over 35p per kg over that time to average 513.8p per kg and some 524.5p per kg for those hitting R4L specification.  The all-steer price is 31.9p per kg more that at the same time in 2023.  Furthermore the strong prices look set to continue as seasonal demand continues to outpace supplies of cattle, as we move into procurement for the Christmas period.  Demand is reported to be strong across both retail and foodservice sectors.  Data from Kantar for the 12 weeks ending 29th September shows an additional 2,100 tonnes of beef purchased compared to 2023.

In contrast, the cull cow price has shown a decline as record numbers come forward ahead of winter housing.  The deadweight price fell by 2p per kg to 353.6ppkg for the week ending 19th October.

Sheep

The GB new season lamb SQQ price has been easing downwards since the end of August, but looks to be stabilising as deadweight prices increased 1p per kg for the week ending 19th October to average 618.5ppkg.  Over this time the difference between 2024 and 2023 prices has narrowed, but 2024 values are still 48p per kg higher than last year.  Tight supplies continue to support farmgate prices; the GB clean sheep kill to the week ending 19th October is estimated to be down by 8.5% on the year to 8.46m head.  However, demand is also strong.  According to the latest Kantar data, for the 12 weeks ending 29th September, lamb outperformed the total grocery market, with a 5.5% increase in volumes purchased.  This, combined with a 4.8% increase in average prices paid, resulted in a 10.6% increase in retail spend on lamb products in this period.

Although midge activity is slowing down, new cases keep coming to light, mainly through active surveillance and pre-movement testing.  Following identification of a new case in cattle on the Buckinghamshire/Northamptonshire border on 25th October the restricted zone has been extended on to include all of Northamptonshire.  The zone now covers Bedfordshire, Berkshire (part), Buckinghamshire, Cambridgeshire, City of Kingston upon Hull, East Riding of Yorkshire, East Sussex, Essex, Greater London, Hampshire (part), Hertfordshire, Kent, Leicestershire (part), Lincolnshire, Norfolk, Northamptonshire, Nottinghamshire, Suffolk, Surrey and West Sussex.  To keep up to date go to https://www.gov.uk/government/collections/bluetongue-information-and-guidance-for-livestock-keepers.

Outbreaks of the bluetongue virus continue to spread in the east of England.  Since the end of August the number of confirmed cases has risen to nearly 100.  There are likely to be a number of further infections in livestock that have not been formally identified.  The latest information on the outbreak can be found at  – https://www.gov.uk/government/collections/bluetongue-information-and-guidance-for-livestock-keepers .  Defra has authorised the use of three bluetongue serotype 3 (BTV-3) vaccines within the United Kingdom.  Unlike the authorised vaccines for other BTV serotypes, these BTV-3 vaccines only reduce viraemia rather than prevent it.  This means they reduce the effect of the disease but do not stop animals being infected.  All the usual movement controls still therefore apply to vaccinated stock.  More details are to be found at – https://www.gov.uk/government/collections/bluetongue-serotype-3-btv-3-vaccine-permits.

The Government has announced a new bovine TB eradication strategy.  It has stated that it aims to bring the badger cull to an end within this Parliament.  Ending the badger cull was in Labour’s manifesto, with some expecting this to happen more quickly.  The existing cull processes will be honoured whist the new measures are being rolled out.  The new measures include:

• Undertaking a badger population survey.  The Government has said it will ‘work at pace’ to launch a new survey this winter, this will be the first to be carried out out since the one between 2011 and 2013
• The introduction of a new National Wildlife Surveillance Programme to provide an up-to-date understanding of the disease in badgers and other wildlife, such as deer, to inform how and where TB vaccines and other eradication measures should be rapidly employed
• Establish a new Badger Vaccinator Field Force to increase badger vaccination ‘at pace’ to drive down TB rates
• A Badger Vaccination Study to allow the Government to rapidly analyse the effect of the badger vaccination on the incidence of TB in cattle
• Accelerating the work on the development of the cattle vaccine.  The Government has said the next stage of field trials will commence in the ‘coming months’, with the aim of delivering an effective cattle TB vaccination strategy ‘within the next few years’.

In addition, the Government has said it will publish more information about animal and herd-level bTB risk on ibTB (an interactive map which can be found at https://ibtb.co.uk/) to help farmers manage their risk when purchasing cattle.

Following the consultation held earlier in the year (see our article of 22nd January 2024 https://abcbooks.co.uk/free-range-egg-consultation/) Defra will alter legislation to allow free-range eggs to continue to be labelled as such for the duration of any mandatory housing measures in England and Scotland.  Under the existing Egg Marketing Standards Regulation, the maximum amount of time allowed for hens to be kept indoors during periods of mandatory housing measures (i.e. bird flu), and the eggs they lay to be still labelled as free-range, is 16 weeks.  After this period of time the eggs must be labelled as ‘barn’.  Defra has said if housing measures are introduced for free-range hens, notices will be issued to inform the public and media of their introduction.  It will also encourage the egg industry and retailers to communicate this to their customers.

Production

AHDB reports that GB milk production was down 0.9% in the April-July compared to the same period in 2023.  However, with prices firming and reasonably good weather conditions, it is believed that production for the rest of the summer and autumn will at least match last-year’s levels.

In global terms, milk production in the main exporting countries is forecast to be almost static in 2024 (down 0.1%).  Output declines in NZ, Argentina and the UK are matched by increases in the US, EU and Australia.

Such meagre growth in output is contributing to firming prices.  However, increases have been slow as global demand remains weak.  In particular, Chinese demand has been very poor.  It imported its lowest amount of dairy products since 2018 in the first half of 2024.  Part of this is down to the continued struggles of the Chinese economy.  However, the country has made significant investments in its own dairy sector and is now satisfying more of its own demand.  Chinese imports may therefore be less of a factor in driving global prices in the future.

Prices

At the latest GDT auction on the 20th August the index rose by 5.5% to reach $3,920 per tonne.  This is the highest level seen since the summer of 2022 and is now 36% higher than the same time last year.

Domestic farmgate milk prices also continue to edge upwards.  A number of companies have announced price increases from the 1st September.  Amoung these are;

• Muller – standard litre up 1.25ppl (to 40.25ppl)
• First Milk – manufacturing price up 1ppl (to 42ppl)
• Leprino Foods (previously Glanbia) – up 1ppl to 41.5ppl
• Meadow Foods – price up by 1.5ppl

New controls came into force in England from 21st August and in Wales from 22nd August to safeguard Britain’s sheep and goat populations from outbreaks of Peste des Petits Ruminants (PPR).  PPR poses no risk to human health but is a highly contagious disease affecting goats and sheep.  The new controls will strengthen the requirements for bringing sheep and goat meat and milk into Great Britain from the European Union (EU), European Free Trade Association states, Greenland and Faroe Islands.  In recent months, there have been outbreaks in mainland Europe, and the commercial import of certain commodities is already restricted to prevent the spread of PPR into Great Britain.  However, the new rules will mean it is now no longer permitted to bring unpackaged sheep and goat meat and meat products, or sheep and goat milk and milk products, from these areas.  Additionally, commercially produced and packaged sheep and goat milk and milk products are not permitted from Greece or Romania.  Scotland is expected to introduce new controls shortly.

 

Beef

The GB cattle price has risen sharply since the middle of July.  The GB deadweight steer overall price stood at 493.1p per kg for the week ending 17th August; up over 12p per kg in the last two weeks.  For the same week in 2023, the price had fallen to 456.7p per kg, before rising throughout the autumn.  Domestic supplies are tight which is supporting prices.  However, ther are reports of an increase in imports from Ireland where export prices have become more competitive recently.  Official import data will not be available for a few weeks yet, but if this is the case the buoyant prices suggests market demand is able to currently absorb this.

Sheep

The GB deadweight New Season (NS) lamb price has remained stable since the middle of July after declining sharply during June.  The NS SQQ deadweight price stood at 664.8p per kg for the w/e 17th August, this compares with 580.7p per kg for the same week in 2023.  Tight domestic supplies and a strong export market are supporting prices.  Furthermore, recent price increase for lamb in both Australia and New Zealand should further support domestic prices.  Imports from these countries have been higher this year than in 2023 because the price has been so competitive.  But in NZ, where prices have been pressured all year, they have risen by 18p per kg in the 3 weeks to August 10th as supplies tighten.  The situation is similar in Australia where it appears demand for lighter lambs earlier in the season means more were slaughtered, impacting supply now.

Since the beginning of June, clean cattle prices have stabilised and are now back above year-earlier levels.  In 2023 prices fell sharply over the summer months, which has not happened this year – helping the year-on-year comnparison.  The latest deadweight All Steer price was 480.9p per kg for the week ending 20th July; some 13.2p per kg above the same week in 2023.  This is despite increased cattle slaughter numbers and import levels.  But prices have been supported by good consumer demand and strong cattle values in Ireland and other European markets.

Furthermore, going into the second half of 2024, a reduction in supply, especially in the final quarter of the year, should help to maintain or even lift prices further.  In the latest AHDB Market Outlook, prime cattle slaughter is forecast to rise by 1% in 2024 to 2.06m head.  However, once slaughter levels so far this year have been accounted for and populations updated for the latest BCMS figures, cattle availability in the 4th quarter is expected to be lower than a year ago.  In addition, prime cattle slaughter is forecast to be down a further 3% in 2025 to 1.99 million head.  Cow slaughter for 2024 has been revised to 604,000 head, down 1% from 2023 and by a further 1% in 2025 as the breeding herd continues to contract.

Taking the above into account the AHDB is forecasting UK beef production to total 903,000 tonnes in 2024, up 0.3% compared to 2023.  However for 2025, this is expected to decline by 2.6%, driven by the decline in the breeding herd.

In terms of the breeding numbers, the 1st December figures showed the UK dairy herd stood at 1.84 million, down 0.5% on the year, meanwhile the suckler herd declined by 4.4% to 1.33 million head.  The total UK breeding herd was 2% down on the year; the steepest annual decline since 2009.  Suckler cow margins have been under pressure for many years and a change in agricultural policy is making businesses assess their options.  Strong beef prices are likely to incentivise culling.  UK cow slaughter numbers were only down 0.3% in the 1st half of 2024, however BCMS data reveals there has been an increase in slaughter out of the beef herd.  In addition to this, growth in heifer kill has actually been the main driver behind increased prime cattle throughputs.  Whilst this means an increase in supply in the short-term, this will result in a fall in the number of females in the breeding herd going forward.