TRADE TALK: Early beef predictions look strong

By Andrew Armstrong
Auctioneer
Darlington Farmers Auction Mart
As we look back over the beginning of 2014 there have been highs and lows in terms of price for finished animals, whether you’re a beef or sheep producer.
The beef sector has incurred a challenging period as supplies outmatched demand for the first prolonged period for some time, thus having a negative effect on farm gate and auction mart prices. As we entered 2014 the average R4L commercial beef animal had a value of 230p/kg live weight or 395p/kg deadweight. At that point there was a feeling beef was becoming, once again, an ever-rising commodity as it was through most of 2013.

As I write this we again have seen 33,000 prime clean beef animals forward this week – up 3,700 head year on year. Over the winter, other European counties produced cheaper and surplus beef and it was inevitable that it made its way to our shores. This was one of the major catalysts in reducing the UK beef price by 25-30p live or 45-50p dead; 200p/kg live or 350p/kg dead as it stands today.
Overall sales of beef have seen a 2% increase during February and early March year on year. This is in the forms of frying steaks and mince. Stewing beef and roasting beef sales are down. This is to partially blame on the mild winter that has passed, also with Easter being three weeks later than last year the consumer psychologically holds onto a winter sales routine.
Beef has become very seasonal in terms of tonnage forward at certain times of the year, therefore on a more positive note, looking forward to summer, consumer beef sales early predictions look to be strong and prime beef volumes less as more headage of prime beef has been sold to date, with cattle finishing quicker due to the mild nights and days also better quality feeds from last year’s harvest.
Prime hoggets last week (3 April) saw some values that aren’t seen very often throughout the year. In Darlington we saw 2,900 hoggets and 1,300 cast sheep forward, with hoggs averaging £99 a head. This current trade, I believe, is due to the milder winter, as more lambs and hoggs have been sold up to date. This week alone saw some 31,000 fewer hoggs forward on the same week last year.
For the last two winters many feeders who put feeding ewes aside for the spring trade will have struggled to see much profit from the task. For the first few months of 2014 this pattern looked to follow suit, as the lambing season got underway cast sheep became scarce and values rose in headage terms of £25 to £30 a head. There is much confidence within the UK sheep sector, most European countries have reported 1% to 5% reductions in national flock sizes, while the UK has reported a 1% rise and this does look good for the 2014/15 lamb season. Let’s hope the value of the Euro against the pound is favourable this coming year in terms of exports.