How is the trade in 2012 comparing to 2011?

4th May 2012

When asked the question "what is the true value of your animals" a large percentage of cattle and sheep farmers don’t accurately know. With prices at unprecedented levels, every animal being slightly different to the next, and not all prospective buyers looking to purchase all categories, it’s not surprising. Why then would anyone suggest that a forum where animals are offered for sale to a ringside of buyers, all of whom are prepared to compete against one another to buy, is not a marketing system that we need in the UK?

It is a fact that the UK deadweight sector is governed by, and has it’s bid price underpinned by trends achieved at livestock markets, and it is accepted by everyone that when supplies are tight any rise in the live market average price is followed by an increase in the deadweight bid price. With nearly all abattoirs reviewing their bid price at the end of the week, for the following weeks kill, it means that the deadweight price offered is more often than not always playing catch up.

AHDB recently released their market statistics for the first quarter of 2012, which concluded:

Prime cattle prices continued to show strong returns within the first quarter of this year seeing average prices, throughout the live auction system, increasing by 34p/kilo, year on year. This equates to an overall average of 186.7p/kilo, with heifers showing the best averages at 190.7p/kilo. A national decline in numbers of some 12% over this period has undoubtedly influenced trends.

Cull cows continue to increase in value, with the first quarter of 2012 seeing market average prices rise by over 24p/kilo, to give an overall average of 126.1p/kilo for all categories sold, compared to the same period in 2011. This trend has been helped by the national kill numbers falling by nearly 8% during the period, putting pressure on supplies throughout the chain. The demand for manufacturing beef has resulted in many markets reporting sales of best bred and fed cows reaching values well in excess of 200p/kilo.

During the first quarter of this year some 6,400 spring lambs were marketed through the live auction system, this representing a 100% increase in numbers on the same period in 2011, confirming our belief that many farmers are returning to the live ring to achieve optimum returns. SQQ prices averaged at 241.1p/kilo across the quarter, an increase of 7p/kilo on levels realised a year earlier. The noticeable drop in prices over recent weeks has been as a result of a weakening Euro and the seasonal change, for most slaughter businesses, from old season lamb to new season lamb.

During the first quarter we saw UK exports of sheep meat up by nearly 8% whilst imports were down by some 21% in February alone.

Old season lambs have experienced a buoyant trade throughout the season until recent weeks when we have seen too many heavy sheep presented for sale, resulting in demand dropping off dramatically. Heavy old season lambs (45.6kg to 52kg) saw an increase in numbers of 13%, while those in the over 52kg category saw an increase in numbers by 55%.

A buoyant trade, in the first quarter of the year, for cull ewes has seen their values reach record levels to give an overall average of £79.40 per head, this being £10.00 per head higher than during the corresponding period in 2011. Most markets have reported averages nearer to £100 per head for lowland bred breeds.

The live auction market is the only marketing system on offer in the UK that provides producers with an open, transparent and competitive bidding mechanism for their livestock, and it is the only place where you can be assured of achieving a true market value for your livestock. If you have not recently experienced the benefits offered through using your local livestock market now has never been a better time to try. Even with the recent price increases we are all experiencing none of us can afford to under sell our produce.

Follow live auction trends, on a daily basis, at www.laa.co.uk