Livestock outlook 2013

A tough year for many livestock farmers in 2012 makes it more important than ever to get a picture of what the future might hold for the industry. Robyn Vinter spoke to EBLEX, BPEX and DairyCo to find out what could be in store for 2013 and beyond.


SHEEP

2012: Difficult trading conditions in 2012 saw slaughterings and production down, with lower exports and imports. Producer prices fell, while comparatively high retail prices caused a drop in demand.

Overall verdict: Prices unlikely to bounce back to highs of 2011 but should stay above 2012 levels providing demand meets the increased supply forecast for 2013.

What’s in store for 2013?


  • Hoping for a return to more “normal” seasonal conditions, which would mean a more even lamb-finishing pattern.
  • Lamb supply expected to grow by 9% in 2013, taking it to close to 13 million head.
  • Exports forecast to grow by 9,000t, taking them to 104,000t– the highest level for a decade.
  • Imports forecast to increase by 12,000t carcass weight to 120,000t.
  • New Zealand imports will continue to be a challenge due to a larger lamb crop and increased production.
  • Lamb consumption in northern Europe is growing, but significant price competition from Ireland.


PIGS

2012: Retail meat purchases last year were close to 2011’s figures, as were both imports and exports. Cost of production, particularly with high feed prices, remained a serious challenge for most producers.

Overall verdict: Prices should rise this spring. A lower EU pig herd will tighten supply and could take producers back into profit – the big unknowns are feed prices, EU consumer reaction to higher pigmeat prices and global demand.

What’s in store for 2013?


  • Sow stall ban creating uncertainty and producers still currently producing at a loss – estimated to be losing £1m per week.
  • UK pig supplies set to tighten further with production forecast to fall by 2%.
  • EU production is also down, so imports set to drop from 980,000t to 935,000t.
  • Export demand should still be robust – forecast is for exports to continue at same level as 2012.


BEEF

2012: High feed prices and cull cow prices saw beef farmers reducing their herds. Exports were down on the exceptional year of 2011 as a result of supply constraints and a stronger sterling.

Overall verdict: The signs are good. Short supply in the EU and at home continuing into 2013 will boost UK farm prices. Quality-assured produce will also benefit from reduced demand for processed meat following the horsemeat scandal.

What’s in store for 2013?


  • Tight prime cattle supply to continue in 2013 with prime cattle slaughterings only forecast to grow by 1.2% – this will help to support prices.
  • Overall production (including cow beef) only forecast to be modestly higher than in 2012 at 883,000t.
  • Exports to maintain similar share of production, with strong demand from the Continent but concerns about exchange rate fluctuations.
  • European beef consumption changing – less demand for cheap, lean bull beef and increased demand for traditional English steer beef for premium markets.


DAIRY

2012: An exceptional year for dairy farmers, 2012 saw challenges in both supply and demand. Cost increases and milk price cuts were well documented, as poor weather and wholesale price falls hit farm incomes.

Overall verdict: Most UK dairy farmers will continue to find it tough going – while competition for milk may bring price and contract improvements, supply and cost volatility will mean the sector remains vulnerable to fluctuating returns and profits.

What’s in store for 2013?


  • Milk production forecast to grow in 2013-14 to 13.5bn litres – assuming better weather conditions enable turnout, grass quality is better and forage stocks are good.
  • Farmgate prices expected to be firm in the short term – there is likely to be some reluctance to move price further until the spring flush is known.
  • Expectation is that feed costs are unlikely to drop significantly during 2013-14.
  • Fall in value of sterling does open up opportunities for exports with less competition from imports.

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