Category: Dairy & Livestock

Legislation to ban the live export of animals has been laid before Parliament.  The Animal Welfare (Livestock Exports) Bill was introduced on the 4th December.  This would prevent the export of cattle, sheep, goats, pigs and horses intended for slaughter (not for breeding) and was one of the Bills announced in the Kings Speech.  It only applies to Great Britain and not Northern Ireland.  It is unclear whether the legislation will get through the Parliamentary process before the General Election next year, or early 2025.  

Production

The AHDB has estimated GB milk deliveries declined by -2.8% year-on-year in October.  Defra’s UK milk deliveries will be available on 30th November.  The wet weather meant many could not take advantage of the good autumn grass growth, having to bring cows in early.  Although some input costs have fallen, others remain high and with current milk prices there is little incentive to push yields.  The AHDB is currently forecasting a -0.5% decline in GB deliveries for the 2023/24 milk year.  Global milk production started to fall year-on-year in August and is now expected to only experience a 0.1% growth in annual production.

Prices

Wholesale markets have seen an uplift over the last couple of months.  These have been supported by results from the GDT events through September and October.  However, at the two auctions held in November the index fell by -0.7% at the earlier one and remained level at the last auction, averaging $3,268.  UK farmgate prices continued to trend downwards in November, but with reduced production and an increase in demand prices appear to be stabilising.  Meadow Foods, Barbers and Wyke Farms have all announced price holds for December.

GB Producer Numbers

In a recent survey carried out by the AHDB, it is estimated that there are 7,500 dairy producers in GB as at October 2023.  This is a decline of -4.5% (350) compared with October 2022.  The AHDB has highlighted the fall in milk price as the ‘major diver’ in the decline in numbers.

GB pig prices have started to decline over the last couple of months.  Before that, finished pig prices had been rising steadily through the first part of the year.  The UK spec GB SPP peaked in August at 221.8p per kg deadweight, some 27.2p per kg more than year-earlier levels.  But since August, prices have been on a downwards trajectory.  The latest price for the week ending 18th November 2023 stood at 213.5p per kg; a marginal -0.1p per kg fall on the week, although still 16.2p per kg above the same week in 2022 and comfortably above the 5-year average.

One of the key reasons for the decline in domestic prices is the fall in pig values across the EU, where prices have dropped by 30.7p per kg since the end of July.  GB prices are heavily influenced by the EU as it is the main supplier of imported product.  Demand for pigmeat has also experienced a decline, both domestically and globally, with the cost-of-living crisis impacting the consumption of most meats.   According to Kantar, the volume of pig meat purchased through retail has fallen by -2.6% for the 52 weeks ending 1st October 2023.  In addition, estimates show supplies have picked up over the last couple of months together with a moderate increase in carcase weights.  All these factors suggest prices are likely to remain under pressure.

Defra announced on 26th November a further four cases of Bluetongue have been found.  The virus has been detected in cattle following active surveillance within the 10km temporary control zone.  The animals were all within 5km of the first finding near Canterbury, Kent back on 11th November.  The cattle will now be culled.  The 10km temporary control zone remains in place and the surveillance will continue, but at the moment Defra has said there is no evidence that the virus is circulating in the midge population.

The Government is undertaking a review focused on ending unfair practices in the egg supply chain.  The full consultation, which closes on 22nd December can be found at https://www.gov.uk/government/consultations/contractual-fairness-and-transparency-in-the-uk-egg-industry   It seeks input from industry stakeholders on transparency, clarity of contractual terms & conditions, and data from the supply chain.  The review will focus on understanding how the contractual arrangements within the sector currently function, and whether there is the need for further legislation to oversee the relationship between producers and buyers.  The review follows a commitment made by the Government at the Farm to Fork Summit held earlier in the year in Downing Street.

 

The NVZ grassland derogation window for 2024 is now open and will close on 31st December 2023.  Those who farm within an NVZ, and where at least 80% of their agricultural area is grassland, can apply to use up to 250kg of nitrogen per hectare, instead of the usual limit of 170kg per hectare.  The nitrogen must come from grazing livestock manure; nitrogen from non-grazing livestock (veal calves, pigs or poultry) must keep within the 170kg per hectare limit.  Applications need to be made to the Environment Agency, more information can be found at https://www.gov.uk/guidance/grassland-derogations-for-livestock-manure-in-nitrate-vulnerable-zones?utm_medium=email&utm_campaign=govuk-notifications-topic&utm_source=9d880448-2877-4cc6-8fee-bc764e9c4d23&utm_content=daily

Bluetongue virus (BTV) has been identified in a single cow in Kent.  This is the first case in Great Britain since 2007 and was found by the Animal and Plant Health Agency (APHA) and the Pirbright Institute through Great Britain’s annual Bluetongue Surveillance Programme.  The cow has been culled and a 10km Temporary Control Zone has been put in place to restrict the movment of cattle, sheep and other ruminants.

Since the start of September a new strain of Bluetongue Virus serotype 3 (BTV-3) has been circulating in the Netherlands with cases also reported in Belgium and Germany.  The infected animal had not been imported.  BTV is a notifiable disease of ruminants, including cattle, sheep, deer, goats and camelids and Defra has asked keepers to remain vigilant.  BTV does not pose a threat to human health or food safety, but the disease can impact productivity on livestock farms.  The virus is mainly spread by adult infected midges biting animals susceptible to the disease.

More information on Bluetongue and how to spot and report the disease can be found via https://www.gov.uk/guidance/bluetongue

The Government set out measures in the King’s Speech on the 7th November to ban the live export of animals.  This would apply to cattle, sheep, goats, pigs and horses for fattening or slaughter.  It would not apply to exports for breeding.

Beef

After strong growth throughout the second half of August and September, the prime cattle price has somewhat plateaued through October but remains strong.  The deadweight All Steer price for the week ending 21st October was 481.9p per kg, which compares with 437.7p per kg for the same week last year.  Prime cattle values still have a little way to go if they are to recover to where they were in May this year (493.9ppkg), but are heading upwards again after sharp declines over the summer period when an upturn in imports impacted prices.

During the first quarter of 2023, UK beef imports were below the previous year’s which, coupled with tight domestic supplies, supported prices through the spring to record levels.  However, imports increased through the summer, driven by an upsurge in shipments from Ireland, where cattle prices had fallen, making them more competitive.  The price differential between Irish and GB cattle is still particularly wide, with Irish R3 steers trading around an 89p per kg discount to GB steers at the beginning of October.  A discount this wide has not been seen since 2015.  But UK production remains tight which is supporting prices.

According to the latest Defra statistics, domestic production levels remain below 2022 levels, both in terms of kill numbers and also slaughter weights.  Beef production in September 2023 stood at 70,000 tonnes, a decrease of 4% compared with August and down 2% compared with September 2022.  Slaughter numbers in September were 1% below year earlier levels, with cow numbers down by 5%.  Prime cattle carcase weights have been lighter throughout 2023.  September weights were -1.5kg less than in September 2022 at 340kg, this also compares with the 5-year average for September which stands at 342.4kg per head.

Lamb

The prime new season lamb price has remained above year-earlier levels since August.  For the week ending 21st October the liveweight SQQ overall price stood at 258.02p per kg compared with 227.28p per kg for the same week in 2022.

In terms of trade, sheep meat imports in 2023 have not followed typical trends.  The usual surge in March was much lower this year and, until August, import levels have been historically low.  But for the first time this year, in August, monthly quantities of imported sheep meat into the UK were higher than levels recorded a year earlier.  More shipments arrived from New Zealand and Australia.  The latter is producing record quantities of sheep meat, bringing down their farmgate price and also New Zealand’s, meaning they are very competitive into EU markets.  Australia is exporting record quantities of sheep meat this year; this is an area to watch, particularly as domestic supplies usually also start to increase at this time of year.

Having said that, the latest production figures from Defra for September show a 7% decline in volume compared with August, to 22,700 tonnes.  This is also 4% lower than for September 2022 and 12% below the 5-year average for September.  The drop in production is down to a fall in the number of slaughterings as carcase weights are only 0.1kg per head below last year’s levels.  UK clean sheep slaughterings in September dropped 4% on the month to 994,000 head and also 4% on the year.  It is not entirely clear why slaughterings are so low, but the good autumn grass growth may have persuaded farmers to keep lambs at pasture rather than look to sell quickly.  This would mean more marketings later in the season at, potentially, higher weights.

UK milk production in September totalled 1,136m litres.  This is a 4.5% decline compared to August 2023 and 1.3% below deliveries for the same month last year.  This is the first month in the 2023/24 milk year that deliveries have been below year-earlier levels.  Cumulative production to date is, however, still ahead of last year, but only by about 0.3%.  Some of the drop in September has been attributed to the disruption from milk haulier Lloyd Fraser going into administration during the month, even so, the AHDB are forecasting milk volumes to slow by at least 0.5% over the rest of the milk year and this could be greater if milk prices do not recover.

In terms of prices, UK dairy wholesale markets made some positive movements during October on the back of declining production.  All products have recorded an increase in prices.  Cream prices have gained by £140 per tonne over the month with both butter and SMP improving by £360 per tonne.  Mild cheddar, although recording an increase, this was lower at just £30 per tonne.  The recent increases in the GDT have also supported commodity markets.  At the two events held in October, the average index has increased by +4.4% and +4.3% respectively and now stands at $3,202 per tonne.  The index has increased by 16.9% over the last four auctions and is now over $3,000 per tonne for the first time since July.

With milk production declining and commodity prices increasing, this should alleviate some pressure from farmgate prices, although it might take a couple of months to filter through.  Meadow Foods and Barbers Cheese have both announced prices will ‘stand-on’ for November.