AHDB’s annual outlook conference set the scene for livestock markets this year. Charlie Taverner reports on the prospects for sheep and beef.
Strong supplies and the weak euro could put pressure on sheep prices in 2015.
Scanning percentages were reported to be “boringly average” but a bigger ewe flock would mean supplies could be higher, said Quality Meat Scotland’s head of economics services Stuart Ashworth
UK sheepmeat production is forecast to rise 4% in 2015 to 309,000t, before staying fairly level the year after.
Clean sheep slaughterings are expected to rise 3%, while the ewe and ram kill could jump 11%.
Mr Ashworth said rising UK production might be offset by falling output elsewhere in Europe and in the southern hemisphere, but the strong pound against the euro could weigh on British prices
“There are opportunities for us to trade that increased sheepmeat production without a fundamental collapse in prices,” he said.
“Except, the exchange rates are moving against us, that is moving against UK producers’ potential to develop and grow new markets.”
“My cautionary note is that the current strong lamb price is likely to come under pressure.”
The UK could receive some support from the long-term decline in New Zealand and Australian lamb production. Ewe numbers in both countries have fallen more than 10% since 2008.
China is fast catching up with the EU as top destination for NZ lamb, which means less will be directed to Europe, while NZ was becoming less a source of cheap sheepmeat.
British sheepmeat exports are expected to rise 4% in 2015, while imports will increase just 2%.
Lower world beef production across the world should keep prices steady in the year ahead.
AHDB/Eblex’s senior analyst Debbie Butcher said domestic supplies would remain fundamentally tight, with fewer cattle slaughtered and the suckler herd still in decline.
UK beef and veal production is expected to fall 2% to 855,000t in 2015 and remain flat the year after.
Ms Butcher said 2015 would contrast with the previous year, when a 2% rise in slaughterings and heavier carcass weights boosted supplies and caused prices to tumble.
“The outlook for farmgate price is slow, steady recovery.
“Some underpinning in the market is likely to prevail this year and that makes a very different position to where we were last year.”
Lower beef production across most of the world would also lend support to prices, Ms Butcher forecast. Slaughterings in Ireland, the UK’s biggest foreign supplier, are expected to drop 8%, which will offset increased French production.
Further afield, only Brazil is forecast to see an increase in beef output, though most of that will end up in Russia, Ms Butcher said.