saturday e27 jun 20 i su no. 6 deadweight cattle prices ... · r3 steer price last week of...

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WEEKLY PUBLICATION OF THE LIVESTOCK AND MEAT COMMISSION Saturday 27 June 2020 Issue No. 2626

LAMB THROUGHPUT INCREASES STRONGLY IN LOCAL PLANTSLast week 10,515 lambs wereprocessed in local plants which is thehighest weekly throughput recordedduring 2020 to date. Strong supplies oflamb have continued to come onto themarket in recent weeks due thefavourable production conditions onmany farms.

During the last six weeks plants inNorthern Ireland have processed51,355 lambs compared to 45,014lambs during the same six week periodin 2019. This represents a 14 per centincrease in throughput year on year.

There has also been an increase in thenumber of lambs exported to Irishprocessing plants for direct slaughter.During the six week period ending 21June 2020 a total of 28,594 lambswere exported, up from 21,438 head inthe same period last year.

The average carcase weight of lambsprocessed in Northern Ireland duringthe last six weeks was 21.1kg, anotable decline from 22.4kg in thesame period last year. With local plantspaying to a maximum of 21kg it makeseconomic sense for producers to killlambs as close to 21kg as possible.

Processors are keen to source lambsthat meet the specification of both theretail and export markets. Lambsshould ideally produce carcases U and

R grading, carcases that weigh 18-21kg, have a fat class two or three andbe Farm Quality Assured.

Reports from the plants have indicatedthat lambs being presented forslaughter are generally of very goodquality. Last week 52 per cent of pricereported lambs were awarded a Ugrade while a further 42 per centachieved an R grade at point ofslaughter.

With strong numbers of lambs comingforward for slaughter the deadweighttrade has started to come under somepressure. Base quotes from the majorprocessors ranged from 425-445p/kgfor R3 grading lambs up to 21kgtowards the end of this week, backfrom a top of 460p/kg last week.Similar base quotes are expected earlynext week.

DEADWEIGHT CATTLE PRICES CONTINUETO INCREASE

With a strong decline in prime cattleavailability for slaughter deadweightcattle prices in Northern Ireland havebeen on an upward trajectory since themiddle of May this year. Towards theend of this week base quotes from themajor processing plants reached a topof 360p/kg for in spec U-3 gradingsteers and heifers.

The continuing improvement in basequotes in recent weeks has beenreflected in the price reporting figures.The average R3 steer price in NI lastweek was 362.1p/kg and this is theseventh consecutive week in whichprices have increased in NorthernIreland. During this seven week periodthe R3 steer price has increased by36.2p/kg which is the equivalent of£127 on a 350kg carcase.

The deadweight trade for prime cattlein Northern Ireland is now well aheadof the same time last year when the R3steer price in the region was338.8p/kg. However it should be notedthat 2019 was a relatively poor year forbeef prices and this recentimprovement in prices has just takenprices to just above the three yearaverage as outlined in Figure 1.

The strong uplift in the trade has beendriven by the tighter supplies of primecattle for processing. During the sevenweeks ending 21 June 2020 therewere 40,858 prime cattle processed inlocal plants compared to 46,683 primecattle during the corresponding periodin 2019. This decline in throughput by5,825 head represents a 12.5 per centdecline year on year.

Great BritainThere has also been a strong uplift inthe deadweight cattle trade in GreatBritain due to a tightening in suppliesof cattle for slaughter with an averageR3 steer price last week of 368.1p/kg.This is the eighth consecutive week inwhich deadweight cattle prices in theregion have increased and brings theR3 price to its highest recorded levelsince November 2018.

R3 steer prices in Great Britain hadbeen trending very close to reportedprices in Northern Ireland during muchof May this year but as we moved intoJune a slight price differential hasdeveloped. Last week the R3 steerprice in Great Britain was 6p/kg aheadof the equivalent price in NorthernIreland. This accounts for a differentialof £21 on a 350kg carcase.

Tighter cattle supplies in Great Britainhave also contributed to theimprovement in the deadweight tradein recent weeks. The latest availableslaughter figures show that during May2020 132,378 prime cattle wereprocessed in Great Britain, back

13,459 head or 9 per cent from May2019 levels.

Republic of Ireland While deadweight cattle prices inNorthern Ireland and Great Britainhave been strongly increasing sinceearly May this has not been the case inIreland. While prices recorded somerecovery in the first few weeks of Maythey have since flat lined in sterlingterms as outlined in Figure 2 above.This has created a significant wideningin the price differential between pricesin Northern Ireland and Great Britainand their closest neighbour.

Last week the R3 steer price in Irelandwas the equivalent of 326.5p/kg. Thiswas 35.6p/kg behind the equivalent

price in Northern Ireland. On a 350kgsteer carcase this accounts for adifferential in monetary terms of £125.

There was also been a notable declinein prime cattle throughput in Irelandduring the May and early June 2020although there has been a strongincrease in throughput during the lastfew weeks which has regained some ofthe losses in production.

During the seven weeks ending 21June 2020 161,631 prime cattle wereprocessed in Ireland, back from170,501 head in the same period in2019. This decline by 8,870 headrepresents a 5.2 per cent decline inthroughput year on year.

Figure 2: Weekly R3 steer prices in Northern Ireland, Great Britain and the Republicof Ireland during 2020 to date Source: LMC, DAFM, AHDB

Figure 1: Weekly R3 steer prices in Northern Ireland during 2020 to date vs2019 and the rolling three year average. Source: LMC Price Reporting

During the sevenweeks ending 21 June 2020prime cattle throughput inNorthern Ireland was back 12.5 per cent and the

R3 steer price increased by36.2p/kg to 362.1p/kg

Lamb throughput in Northern Ireland during

the six weeks ending 21 June 2020was 14 per cent higher than the

same period in 2019

Image 1: There has been a strong increase in lamb throughput in Northern Irelandin recent weeks and buyers are keen to source lambs that meet customerspecifications.