Annual declines of more than 2% in the national beef and dairy herds recorded in the June Agricultural Survey are expected to continue over the coming year, according to the latest market outlook from EBLEX, the industry body for beef and lamb levy payers. Coupled with relatively stable imports, exports and domestic consumption, this is forecast to leave the national beef market in a very similar balance to the past 12 months.
Higher than anticipated heifer and young bull slaughterings in 2009 led estimated production for the year to be around 2.5% higher that originally assumed. However, this was accompanied by somewhat lower import and higher export levels. As a result, finished cattle prices remained as firm and stable as initially forecast throughout the year despite the inevitable weakening in consumer demand prompted by the recession.
BCMS calf registrations indicate more dairy-bred bull calves being reared over the past 18 months, so young bull slaughterings are expected to increase still further in 2010. This is almost certain to be more than offset by declining beef-bred steer and heifer numbers, though, resulting in slaughterings back by around 1% on 2009.
The changing slaughter mix, a more typical growing season and an expected increase in feed prices later in the year are assumed to keep a lid on carcase weights. At the same time, cow and adult bull slaughterings for the food chain are likely to continue declining. Overall, therefore, total beef and veal supplies are forecast to fall by a similar amount to prime beef slaughterings.
The fall in consumer demand for beef is estimated to have reduced imports – mainly from Ireland and Brazil – by around 8% in 2009. With sterling not expected to strengthen significantly against the euro, in particular, domestic supplies are likely to continue to be favoured by the market, although some slight increase in imports may be on the cards to fill any gap left by declining levels of UK production.
The weak pound has also continued to help exports over the past year and with the support of increased EBLEX export marketing activity, the higher levels of 2009 are forecast to be maintained over 2010. Comparatively high cow prices against continental supplies have limited trade in recent months, sounding a warning for future exportability. Set against this, however, is an encouraging increase in levels of prime beef being shipped abroad.
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