Menu Fresh Meat Market Report – May 2021

Both old season and new season lightweight lamb prices have increased during the past week. In the week ending 5 May, the GB Liveweight OSL (Old Season Lamb) SQQ (Standard Quality Quotation) prices increased 6.6p on the week to average 296.41p/kg. Prices are up 89p when compared to the same week in 2020 and now 91p above the 5-year average.

Liveweight NSL (New Season Lamb) SQQ prices averaged 358.72p/kg for the week ending 5 May, an increase of 11.1p on the previous week and 101p on the same week last year.

Throughputs at British auction markets for the week totalled 100,300 head, up 10,800 head (12%) on the previous week. New-season lambs are coming forward earlier this year than last year and accounted for 30% of total auction market throughputs in the last week. This is likely to be due to the high prices encouraging lambs to be finished earlier on the farm; processors keen to source them, with lower numbers of old season lambs available.

Deadweight lamb prices dropped back during the last week. For the week ending 1 May, GB deadweight OSL SQQ averaged 644.3p/kg, down 29.9p on the previous week. Prices are currently up by 171p on the same week of the previous year and 181p higher than the five-year average. The GB deadweight NSL SQQ averaged 685.8p/kg, down 0.8p on the previous week.

A few weeks ago, it appeared that the relatively high price levels in the UK might have been a constraint on exports to Germany (and France). But prices have been since been surging on the continent, which is helping to maintain the higher price here.

Imported lamb has seen a 6-8% increase over the last few weeks with limited numbers coming into the country and demand being high the increases are set to continue.

More than 200 outbreaks of avian influenza across Poland over the past few months have sparked fears of a shortage of cuts imported into the UK.

There might be a depressed market for some time. The UK supply chain is ok, but suppliers will be trying to fill the shortfall with UK product, which is already oversubscribed due to retail demand, this demand will no doubt go up, and it is already stretched. The impact of short supply is expected to last between 10-12 weeks and please note a finished bird is ready from hatching in 30 days.

Poland, the largest supplier of European Poultry in the UK, has had an outbreak of Avian flu that resulted in the slaughter of over 20 million chickens last week alone to try and reduce the threat of further spreading. The disease is now widespread across Europe with France culling over 10 million ducks over the last 3 weeks and Poland a further 15 million.

The cost of feed has increased by over 10% in the last 3 months driving farmers to finish larger birds versus smaller birds, thus putting extreme pressure on the smaller size fillets such as 5/6oz. In most cases, suppliers have zero stock of what was a standard size fillet available to the market.

Suppliers of poultry are now limiting supply lines into the UK with most deliveries being short and, in some cases up to 40% of the order, depending on the products being delivered. The cost of boneless breast meat has risen by 15% since 1st May.

The easing of Covid regulations with the outside dining has put demands on what were already very tight markets for poultry and pork, driven by reduced menus centred around poultry. This will be further compounded once the next easing on the 17th May for inside dining opens.

Packaging materials have also risen and are set to rise further which will have an impact on production costs for all species.

Pork prices remain stable with slight movements up over the last few weeks. Last week the GB EU-spec SPP jumped by 2.34p, this is the largest week-on-week growth recorded since August 2016.

Estimated clean pig slaughter at GB abattoirs totalled 177,700 head for the week, up 0.4% from the week before which has been steady for the last few weeks and up 2% on the same week a year ago.

Feed prices have been rallying strongly, and pose a major concern for pig producers. The USDA forecasts the UK to stay a net importer of wheat for 2021/22, which by itself would continue to support wheat prices. The delay in planting the 2021 US maize crop is part of the reason US maize, and so UK wheat, prices have been rising and could have big impacts this year.

The market is set to tighten over the next few months as farmers and processors try to drive prices upwards.

When restrictions are eased, we expect the product to tighten even more and put pressure on pricing.

GB finished cattle prices have continued to climb in the latest week. The GB all prime average stood at 407.3p/kg, up 1.1p on the week before. This puts the measure 87p above the same week last year and 67.6p above the five-year average.

The estimated slaughter for the week totalled 34,000 head, up 3.5% (1,200 head) on the previous week, but virtually unchanged (-0.3%) compared to the same week last year.

Looking at retail volumes, GB household beef purchases continue to hold their ground. While retail volumes sold dropped back 4.7% year-on-year in the 12 weeks to 18 April, this is compared to the start of the Coronavirus pandemic, with total beef volumes lifting 11% compared to the same period two years ago.

However, as we continue to come out of lockdown and food services begin to re-open, some of this demand will undoubtedly shift back out of home, which could lessen demand for British cattle. The impact of this on GB prices is yet to be seen.

Price increases were seen across all prime categories except young bulls, down 1.5p on the previous week, while R4L steers saw the largest increase (+2.5p) to average 418.4p/kg.

Cow trade also firmed in the latest week, with GB prices lifting 0.8p to average 280.3p/kg in the week ending 1 May. This puts prices 64.3p above the same week in 2020. For those meeting the -O4L specification, prices lifted 1.7p on the previous week to an average of 297.0p/kg for the week.

Estimated cow throughput was up 300 head (3.2%) on the previous week to a total of 10,100 head for the week. This is 600 head more than the same week last year.

The domestic supply side is forecast to remain tight for some time to come. Tighter supplies and higher prices may also help explain why cattle appear to be coming forward slightly younger than is typical for the time of year, a trend not seen for some time. As previously noted, tight supplies and rising prices continue to dictate the market.

Prices on imported beef supply are currently 10-15% up across all primals on previous levels driven by uncertainty in the market and are expected to be in place for the next 6-8 weeks until the market settles and re-opens fully from May 17th. Suppliers are reluctant to commit to volumes and export full containers of single items due to a lack of clarity around sales.