Livestock trade highs and lows of 2013

Livestock trade ended the year on a high after a shaky start, as Jeremy Hunt reports

Lamb prices showed a strong recovery from the lows at the start of the year, but high costs of production after the difficult winter and spring took their toll on margins.

Finished lamb supplies were tight in mid-summer and this kept prices high, with the national average hitting 223p/kg by mid-July.

But the market then dipped sharply and four weeks later had lost more than 40p/kg. By early December the national average was around 171p/kg, although too many over-fit lambs were causing problems at some centres.

Although the midsummer drop in price hit producers hard when trying to recoup last winter’s costs, auctioneers say finished lambs have certainly earned more than they did in 2012 but didn’t match 2011.

Some consumer resistance continues to impact on prices, and while nothing has happened this year to trigger expansion of the sheep sector, there are early signs of continued confidence.

There was a 5% lift in the volume of sheepmeat produced in the UK up to September – up to 205,800 tonnes – and there was a 6% increase in the number of prime lambs slaughtered, to reach 8.79 million.

The bad weather of 2012 was partly the reason for these increases. It meant fewer lambs were sold during the latter part of 2012, but these animals then hit the market in 2013.

Despite bad weather at lambing time, which added even more costs to an expensive wintering period, improved weather by midsummer saw lamb marketing return to a more normal seasonal pattern.

Hill farmers faced the brunt of the high costs up to lambing time, with many admitting this year’s lambs were relying on “brown envelope” money to show any margin at all.

About 1.5 million adult sheep were slaughtered during the first nine months of 2013 – that’s 14% higher than the year before, but the early part of the year saw lamb slaughtering weights slightly lower at 19kg.

Kivells and Husseys auctioneer Russell Steer, from Exeter Livestock Centre, says every penny earned by early spring lambs making £100 apiece and over was needed to cover the higher costs of production. However, the strong prices of late spring and early summer should have seen more second-quality ewe hoggs come into the fat ring, rather than held back for breeding sales when many ended up making less.

But there were some encouraging signs as the first early-lambing ewes with lambs at foot hit the market in the South West in December. “Ewes and couples have been a flying trade at £65 a life for just 10-day-old lambs, so there’s definitely some confidence in the job,” says Mr Steer.

Commercial tup buyers were in careful mode this autumn, but there were the anticipated big spenders among pedigree flock owners.

Among the highlights of the year were the 13 ram lambs at the Texel Sheep Society’s Scottish National Sale that made five-figure prices and achieved a top of 48,000gns. This was on a day that saw ram lambs from the Innes family’s Strathbogie flock earn more than £128,000.

Suffolk breeders ended the year on a high note, spending £270,000 on stock from Robbie Wilson’s Strathisla flock dispersal and taking bidding to a top of 10,000gns for a ewe. John Thorpe and Mary Dawson topped the Swaledale tups at Hawes in October, earning £65,000 for their shearling Blackburn Emperor. This sale levelled 676 rams at £1,601 – but that was £158 back on the year.

Breeding sheep prices held their levels or eased back at some centres. The opening sale of North of England Mule ewe lambs at Hexham saw prices achieve exactly the previous year’s level of £116. While some sales were down to about £92, many centres reached averages of about £100 or just over.

Beef

Finished cattle prices have remained strong all year, reaching record highs in the summer, but there was an easing in values over the late summer months. And as the year drew to a close there was undoubtedly a marked steadiness in the trade. In mid-July the market average hit 212p/kg, but by early November the average had dipped to 194p/kg.

Supplies have remained tight, but good prices are only one side of the beef story. Rising production costs make the peaks of 2013 an essential requirement for profitability and the lower levels of late autumn a cause for concern.

Auctioneers believe their vendors with large-scale businesses are faring better than those with fewer cattle to market, but recognise an on-going improvement during 2013 of the quality of finished cattle being presented.

“There’s definitely a growing awareness among finishers about what the buyers want. There’s a lot more “kill” among the best finishers’ cattle. And even those finishing black and white steers off grass are putting some really good cattle on to the market,” says Peter Kingwill, auctioneer with Hobbs Parker.

“But the trade hasn’t finished the year as we would have liked it to, even though I’m optimistic about the coming year. The average-quality cattle were making less in late November, but the top-end sorts still held on to a decent premium.

“There’s a bit more consumer resistance creeping in at home, but the higher prices finished cattle were making during 2013 are vital to keep finishers in business,” he says.

In 2013 pedigree Limousin cattle – 1,599 head – were sold at official breed society sales and had grossed £5,435,600 by early December. In the past five years £38,693,592 has been spent on trading in Limousin cattle through the ring.

The year’s top Limousin price was 40,000gns, paid for Mereside Godolphin from R M Hazard and Sons, Grantham, while females reached 17,000gns for Grahams Gayla from Robert and Jean Graham, Stirling.

Bull buyers may not have been on a spending spree during 2013, but the breed society sale of Charolais cattle at Welshpool in November confirmed a good year for the breed among commercial buyers.

This sale hit a centre record of just over £4,000 for 77 bulls and a top price of 9,800gns. Charolais bulls averaged £6,900 at Stirling to get the year off to a good start, but it was the Carlisle fixture in May that gave the breed its 2013 top price of 31,000gns.

A 10% lift in membership of the Beef Shorthorn Society confirmed the growing interest in native breed cattle. A record number of 160 Beef Shorthorn females were sold during 2013 and bull prices reached 12,000gns – a situation being fuelled by the 30p/kg premium being paid for purebred Beef Shorthorn cattle by Morrisons.

Dairy

Despite the issues over milk price in the early part of 2013, coupled with poor-quality forage and the difficult winter and late spring, dairystock values have been maintained. It may have been a good summer and autumn, but this has still been a high-cost year for milk producers.

Commenting on trade, Tom Brooksbank of auctioneers Norton and Brooksbank says: “Best-quality heifers have continued to make £1,700 up to £2,500 or more and even young cows have continued to sell well, driven by the need for replacements in expanding commercial herds. But there’s not been a lot spare cash about from those looking to invest in pedigree heifers costing over, say, the 4000gns level and certainly a shortage of new investors wanting to put money into black and white genetics.”

Auctioneer Meg Elliott of Bagshaws has seen a strong trade throughout the year for dairy cattle sold through Leek market’s regular sales. “We’re seeing buyers consistently looking for cattle because they are committed to staying in milk production and many are expanding. It has kept prices very buoyant throughout 2013, with the top-end freshly calved heifers consistently averaging more than £2,000.

“But we’d like more cattle. When we’ve 50 cattle in the market we could probably sell twice that number,” says Ms Elliot.

Second calvers were reaching £2,600 – with plenty over £2,000 – at the Western Holstein Club’s sale at Beeston Castle, Cheshire, in November, according to Wright Manley auctioneer Clive Norbury.

The top price paid for a Holstein during 2013 was 10,200gns, for Andrew and Jane Whittaker’s Knowlesmere Braxton Missy at the Black and White sale, while 9,200gns was paid for the year’s top-selling British Friesian – Skyhigh Quentin Pauline offered at the Skyhigh dispersal.

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