Cattle prices stay same: MLC report
By Philip Clarke
DEPRESSED cattle prices look set to continue for the rest of the year, according to the Meat and Livestock Commissions latest Market Outlook publication.
Prices are currently at a 16-year low, with finished cattle making less today than at any point since the BSE crisis broke in Mar 1996.
Extra slaughterings and more imports are the key features behind this bleak scenario.
First quarter slaughterings were up 3% on last year, according to the MLC report, and the second quarter is expected to be significantly ahead at 536,000 head.
Imports have also grown by an estimated 16% in the first three months of 1997, spurred on by the favorable exchange rate. The impact of this has been compounded by lower levels of acceptance of UK beef into intervention stores, with almost all offers scaled back due to too high a tender price.
Scope for improvement
"More of the same" is the prediction for the rest of the year, though there is some scope for improvement from this weeks 90p/kg.
Over the full 12 months the MLC is predicting a 5% rise in prime cattle slaughterings to 2.2m. (This is slightly down on the previous Market Outlook forecast, with December census figures showing a bigger than expected decline in the breeding herd.) But, with fewer slaughterings in the older age bracket and lower carcass weights, actual beef production is anticipated to be 4% down in 1997 at 671,000t.
But this will be more than offset by the historically high level of imports (182,000t), lower offtake of beef into intervention (66,000t) and the almost total absence of exports, giving rise to a 4.5% rise in total supply to 782,000t.
In fact, the MLC does include a figure of 5000t for exports. With all five preconditions set out in the Florence agreement now in place, there is a possibility of the export market reopening, though this will not be until late in the year and will only gather pace slowly.
As such, the MLC predicts a continuing imbalance between supply and demand, with depressing implications for prices.