The livestock sector won’t look back on 2015 as a vintage year for profitability.
But while most businesses have had to dig deep to weather the effects of currency and world market demand, resilience and survival have undoubtedly been the year’s watchwords among stock producers.
It has been a roller-coaster ride for the commercial sheep sector. The strong value of sterling hammered the export market and inevitably bit hard into prime lamb prices, which began to show a glimmer of improvement by late autumn.
While some hoggets did manage to reach £100 early in the year, the overall trade was lacklustre and proved to be a clear indication of troubled times ahead.
By the time the first new season lambs headed over the weighbridge, producers saw values back at least £10 on the year.
Across the UK, prices continued at a low level throughout the summer, with lambs often struggling to make over £60. It wasn’t until early autumn that some markets saw any hint of improvement as buyers paid an extra £8 to £10. It saw the best lambs hitting £70 and up to £80 at some markets.
Auctioneer Russell Steer of Kivells at Exeter says new season lambs by May were ranging from £70-£90 apiece. “Overall they were £10-£12 less than 2014 and then prices fell further. That’s where we stayed for the rest of the summer, with lambs often struggling to average £60.
“During September to October prices averaged in the mid-£60 region – about the same as last year – but although there was a slight improvement the trade was still very slow. And there are still a lot of lambs to come forward.”
Good cull ewes consistently making three figures or thereabouts fuelled flock clear-outs to generate cash for replacements and set the scene for the unexpected confidence at the autumn breeding sales.
Hill and upland flocks producing breeding sheep were braced for cash-starved finished lamb producers to hold back from buying replacements, but the autumn saw a much stronger trade for breeding sheep than anyone had forecast.
Although female breeding sheep averages were marginally down – North of England Mule shearlings were back about £10 – good shearlings were readily bought at £130-£140.
“And one of the highlights in the North during the autumn was the demand for Swaledale draft ewes,” comments Mark Richardson of auctioneers Harrison and Hetherington at Kirkby Stephen.
“Demand was very strong with averages around £126 at some sales.”
Pedigree sheep prices have confirmed the underlying confidence in the UK sheep sector. The good trade for North of England Mules livened up trading for Bluefaced Leicester tups, with prices reaching a breed record of £34,000 and record average of £7,108 at the Hawes two-day breeding sale.
Although tup buyers lowered their average spend at the Kelso sale by £73 a ram, they bought 4,313 sires for an average price of £610. This saw sheep producers invest just over £2.5m in ram power in one day.
A year of “missed opportunities” is how some auctioneers describe the 2015 prime cattle trade.
While prices have remained relatively stable for the most wanted sorts – 540kg good-quality continental steers were making 220p/kg and over – auctioneers felt more initiatives could have come from the beef marketing sector to create wider opportunities and improved prices for the full range of beef cattle forward week on week.
“Margins remain tight for most producers and high store cattle prices play a part in that – but we all know the suckler herds producing those store cattle are equally under pressure,” says Peter Kingwill of Kent-based Hobbs Parker.
“Compared with market prices in 2014, we haven’t been too far away, but the best cattle – those medium-weight steers around 520-580kg or even at 480-580kg and bound for the quality retail outlets – will make over 200p/kg.
“The heavier-weight cattle – those over 400kg deadweight – are being penalised,” he adds.
Lack of export demand
The lack of any export demand continues to put pressure on the prime cattle trade, but auctioneers agree producers could be allowed to earn more from their cattle if the industry explores opportunities and developed wide markets for “the best and the worst”. What do they mean?
Other auctioneers reflecting on the 2015 prime beef trade describe it as “reasonable but unspectacular”.
Top-quality butcher-type beef heifers have been the highlight of the year for some markets where the best have sold at 210-220p/kg, although high spots of over 240p/kg were also being achieved this autumn.
The pedigree beef market has seen committed breeders strengthening their investments in both bulls and females. Commercial bull buyers have been increasingly selective and paying more attention this year to health-tested sires and those providing proven performance records via EBVs.
The trauma that hit the milk sector this year had some adverse effects on prices for dairy stock and newly calved heifers – but not as much as was initially feared.
And surprisingly there hasn’t been the surge of dispersal sales that were widely expected.
Some auctioneers say the demand for fresh calvers for most of the year remained relatively buoyant, largely driven by milk producers seeking to put on a few extra cows to increase milk sales.
Others believe the attractive cull cow price has encouraged an ongoing clear out in some herds and fuelled a need to milk the best affordable cows.
Glyn Lucas, senior dairy auctioneer with Harrison and Hetherington at Carlisle, agrees the exceptional cull cow trade had enabled milk producers to sell any problem cows and replace them with fresh heifers.
Pedigree in-milk heifers
“The year started off with a strong trade and saw our pedigree in-milk heifers averaging £1,702.
“July was probably our lowest month with averages at £1,336, but by August we levelled at £1,585 and by September the figure was back to £1,768. The commercial averages were usually about £150 less,” adds Mr Lucas.
Meg Elliott of Bagshaws says dairy cow prices began to ease in November after a month or two of stronger prices. She says: “But prices have held up amazingly well and buyers on good milk contracts have been more confident about buying. However a lot of smaller herds have quietly sold up this year.”
In the South West pedigree black and white cattle prices have also been surprisingly stable, according to auctioneer Derek Biss of Greenslade Taylor Hunt.
“The trade hasn’t been a million miles away from being on a par with 2014.
“But there’s not a lot of cash in the system and pedigree prices took a bit of a knock during late autumn. However, in October we achieved an average of £1,800 for a small pedigree herd reduction sale and we were up at that level for two sales during the summer.
“I don’t think pedigree black and white prices have been down more than £200 compared with previous years. The trade has surprised me, but farmers have been looking for more milk and wanted good-quality cattle that will pay the bills. So we’ve seen cows bought to generate some extra cash.
“Good-quality fresh calvers have still been making up to £2,000, but on average good-quality heifers have been around £1,400 – although understandably the poorer-quality sorts have taken the biggest hit this year.”