One month into 2014 and hogg prices are showing particular strength, according to the latest analysis by Quality Meat Scotland (QMS).
Since the turn of the year, Scottish auction prices for hoggs have increased by around four percent and stand some 22% better than last year, said Stuart Ashworth, QMS’s Head of Economics Services. Hogg prices do, however, remain four percent lower than in early February 2012.
“One of the main drivers for this price increase is availability. Compared to this time last year the auctions are handling eight to nine percent fewer hoggs and volumes are also marginally below the levels reaching auctions in early 2012.
“A second element to the price change is hogg quality. The number of animals measured as grading R3L or better is marginally ahead of last year and better than 2012,” observed Mr Ashworth.
The situation for heavy lambs is similar across Europe, with prices around 15% above year earlier levels but failing to match the levels of 2012. However, for light lambs, under 12.5 Kg deadweight, prices are trailing both 2013 and 2012 levels.
Although prices in France and Ireland are above the levels seen in 2013, the French price has slipped over the past four weeks, while the Irish price has stabilised. Ireland has also seen hogg volumes reaching the market fall around 10% on this time last year.
“The contraction of the French breeding flock has seen their lamb kill fall almost four percent during 2013.
“However, although French production fell, so too did their imports of sheepmeat meaning they consumed less sheepmeat in 2013 than 2012. French government forecasts suggest that production, imports and consumption will all fall further in 2014,” said Mr Ashworth.
On a more positive note, the UK share of exports to France has increased at the expense of both Ireland and New Zealand, he said.
“Furthermore, New Zealand once again failed to make full use of its preferential import allocation, or tariff rate quota, in 2013 and instead grew its exports to China. New Zealand’s need to supply Europe in spring 2014 is then diminishing as it benefits from a growing Asian market which is increasingly taking higher value cuts,” commented Mr Ashworth.
Beef and Lamb New Zealand forecast the availability of export lambs from New Zealand over the 2013-2014 to be down by five to seven percent. Meanwhile, New Zealand slaughter statistics show their lamb kill in the final quarter of 2013 was up three percent which, he said, points towards a tighter supply as their marketing year progresses. New Zealand producers are currently benefiting from farmgate prices around 15% higher than in 2013 in local currency and 10% higher in Euro. They do however, remain well below European prices and very competitive.
While the sheep market looks robust, the cattle market continues to come under pressure with prices in Scotland falling four percent since the turn of the year, though remaining four percent higher than last year. In contrast the price in England and Wales has fallen three percent and is very similar to last year. Meanwhile, the Irish price has remained flat over the past month.
“Unlike the hogg market, the prime cattle market is a little better supplied than last year with price reporting abattoirs showing throughputs about two percent higher than a year ago in England and Wales but at similar levels in Scotland,” added Mr Ashworth.
“The English and Welsh abattoirs are also much better supplied than then they were in autumn 2013 while Scottish abattoir volumes are similar to autumn levels. Irish abattoirs are even better supplied, with current throughputs up around six to seven percent on the year, although young bull volumes are much lower.”