Foot and mouth restrictions in August and September have resulted
in a significant backlog of up to 400,000 head of lambs and 19,000
prime cattle across Great Britain, according to the latest analyses
from the English Beef and Lamb Executive (EBLEX) which expects
this backlog to have grown still further through October.
With over-hangs of this size to be cleared in late 2007 and early
2008, producers can expect a continuing knock-on effect of FMD
on both market prices and volatility in the coming weeks. All the
more so since the average carcase weight of lambs sold deadweight
this autumn has been a good 4% higher than the same period last
Overall, clean sheep slaughterings in England and Wales were 30%
lower than 2006 in August and 15% down in September, with liveweight
sales hit particularly badly. While live trade volumes have since
recovered sharply, sale levels over the first three weeks of October
have still been 60% below last year. What is more, sales of the
heaviest lambs (over 45.5 kg liveweight) have increased markedly,
putting further pressure on the market.
Not surprisingly perhaps given the acute disruptions to live markets,
the EBLEX analyses show liveweight prices have been affected to
a noticeably greater extent than deadweight values. At 80p/kg,
the average SQQ price for finished lambs in the first three weeks
of October was 28% down on the trade before FMD. In contrast, carcases
averaged 207p/kg over the same period - or only 20% down on the
level recorded before FMD. Even so this remains a very disappointing
11% below the long-term average for the time of the year.
Even greater falls have been recorded in the lighter weight lamb
categories as a result of export restrictions which cut UK exports
by 5200 tonnes or 67% in August alone and resulted in some 200,000-250,000
more sheep being directed to the domestic market.
The relative seasonality of marketings means the cattle trade
has been proportionately less affected by FMD than the sheep sector,
with prime cattle slaughterings down 7% on 2006 in both August
Cow disposals have, however, seen a far greater impact, with year-on-year
slaughterings down 37% in August and nearly 14% in September -
a total of almost 17,000 cows less than 2006 over the two months.
Prime cattle prices in England and Wales remained notably stable
throughout the outbreak, actually increasing from around 200 p/kg
deadweight just before FMD to 205 p/kg by the end of September.
Although this could easily change for the worse as the backlog
of stock comes onto the market in the coming few weeks, the effect
of increased marketings may well be offset by the normal seasonal
rise in beef prices.
In contrast, cow prices have been on a seesaw - plunging from
an average of 140 p/kg deadweight just prior to the first case
of FMD to 118 p/kg in mid-August and bouncing back to nearly 140
p/kg with the lifting of initial restrictions only to fall back
to 114p/kg with the second wave of sanctions.
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