Cattle and sheep prices strengthen but pig prices ease

Cattle and sheep farmers have seen some lift in prices over the past couple of months, however pig producers have seen farmgate prices fall by around 10p per kg deadweight (dwt) over the past 12 weeks.  

Looking at the current market from a pig sector perspective there has been an increase in slaughter volumes, said Stuart Ashworth, Quality Meat Scotland’s Head of Economics Services. Mirroring the situation in the other sectors, an increase in carcase weights has been pushing the volume of meat available higher still. 

“So during September pigmeat production in the UK was over 5% higher than a year ago while the number of pigs killed only increased by 3.5%,” said Mr Ashworth.

“Adding to this increased domestic volume is an increased pigmeat availability in mainland Europe as a consequence of Russia excluding European pigmeat from its market. 

“Furthermore, as pigmeat production in the United States recovers from the impact of the PeD virus while also being excluded from Russia, Europe’s ability to find alternative markets outside Europe for its pigmeat becomes more difficult.”

The almost inevitable consequence of this, he observed, will be that European and UK pigmeat prices will come under pressure as more pigmeat is left on the European market.

This scenario contrasts sharply with the sheep sector where - relative to earlier in the summer - the volume of sheep on the market has diminished. 

Between June 2014 and the end of August 2014, UK lamb slaughterings were 5.8% higher than last year. However, observed Mr Ashworth, during September slaughterings were only 1% higher and auction sales during October would suggest the number of lambs sold through Scottish auctions has fallen below year-earlier levels more recently. 

“With the number of ewes slaughtered also lower than last year - despite increased lamb carcase weights - sheepmeat  production has reduced compared with year earlier levels and market prices have strengthened, rebounding to levels seen in early August,” added Mr Ashworth.

Unlike the pig sector, European sheepmeat availability remains similar to the levels of the previous year and Russian decisions on meat exports have minimal direct impact on the global sheepmeat market. 

“The immediate prospects for the pig producer will be heavily determined by international politics and trade decisions, while for the sheepmeat producer they probably lie more with the orderly marketing of lambs and hoggs,” he observed.

Of particular importance, Mr Ashworth said, was the extent to which there are a higher number of lambs on UK farms to be marketed before April 2015, compared with this year.

Provisional census results suggests an extra 660,000 lambs were born in the UK in 2014 and by the end of September only an extra 190,000 had been slaughtered, compared with the previous year.

While there may be some additional retentions for breeding it does nevertheless seem likely that the UK lamb and hogg market will remain well supplied into 2015.

Meanwhile, cattle producers have benefited from a slow and steady increase in market prices through the autumn. This has seen a 8% increase in deadweight price since early August, as supplies have tightened. 

“According to slaughter statistics, the UK slaughtered 8% more prime cattle in August than it did last year. 

“During September the total slaughter was less than 1% higher that the previous year and indications from auction sales and slaughter estimates suggest that  total cattle supplies in October tightened further. 

With the UK census showing a 1.5% decline in slaughter cattle between 12 and 24 months old in June, it seems likely this tighter supply scenario will persist for a while.