HEADLINE PRODUCER PRICES

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1 UK Market Survey 27 January /04 Consumers spend more on red meat at Christmas Consumers spent 293 million on fresh and frozen red meat this December, three per cent more than in the corresponding period in Increased average prices drove the increase in expenditure. A combination of fewer promotions and food price inflation meant beef, lamb and pork prices were all higher than in the previous year. In the four weeks to 25 December the volume of purchases across all red meat categories and chicken were lower compared to the previous year. In December 2010 snowy conditions meant consumers purchased more on each shopping trip to ensure they were adequately stocked. This significantly increased red meat purchases, in particular beef. The same weather conditions did not occur this year, with December far warmer and drier. As expected, household purchases declined year on year. As a result of the irregular trade pattern in December 2010, we have analysed how the latest December performance compared to the previous five years. This reflects a far more positive position, with pork purchases eight per cent higher and beef purchases up slightly on the five year average. Lamb purchases are almost two per cent lower compared to the past five year average, with reduced supply brought about by exceptional market conditions contributing to this. In the 52week period ended 25 December, lamb purchases and expenditure declined on the year with roasting joints the worst performing cut over the year as a whole. Lower import volumes and higher exports have limited availability in the year as a whole. Processors have been able to command a high export price, and as a result there was less pressure on retailers to promote their lamb offering. Availability has been the major factor in, but high retail prices, in particular compared to pork and chicken, also encouraged consumers to switch to cheaper protein alternatives. Household purchases of beef also declined during, however expenditure increased one per cent as a result of a four per cent increase in price. In particular, purchases of roasting joints and steaks declined on the (Continued on page 6) HEADLINE PODUCE PICES GEAT BITAIN DEADWEIGHT Week ended Inside this week Price p/kg Consumers spend more on red meat at Christmas Latest Kantar household purchase data to 25 December Pence change Pigs GB DAPP (euro spec) GB DAPP (UK spec) GB Cattle Deadweight 4L Steers L Heifers Young bulls L cows GB Sheep Deadweight Old/new season SQQ lambs GEAT BITAIN LIVEWEIGHT Week ended (Thurs/Wed) Price p/kg Pence change All steers All heifers All young bulls All cows Old/new season SQQ lambs

2 Cattle market trends p per kg dw per 100 kg dw GB 4L deadweight steer price J F M A M J J A S O N D EU deadweight cattle prices / M A M J J A S O N D J F Germany (YB) France (YB) Italy (YB) Ireland (Steers) Source: EBLEX / AHDB Estimated GB prime cattle slaughterings J F M A M J J A S O N D Source: EBLEX / AHDB GB (Steers) Source: EU Commission Household fresh and frozen beef purchases 12 week yearonyear changes in volume J F M A M J J A S O O N D Source: Kantar Worldpanel 2012 Prices In week ended 21 January the deadweight cattle trade fluctuated. The overall steer average was 329.7p per kg, down a penny on the week, while the average price of 4L carcases at 337.8p per kg was little changed on the week. The overall heifer average strengthened a penny to 332.4p per kg while the price of 4L heifers eased marginally to 334.4p per kg. With cattle numbers short reports suggest that there has been some upward pressure on prices in the current week as processors attempted to source adequate supplies. AHDB estimated slaughterings indicate that throughputs in the first three weeks of this year are 14 per cent down on year earlier levels. Following the fall in price last week, with demand on the continent firming and processors returning to full weekly volumes the 04L cow average increased two pence on the week to 255.0p per kg. Largely as a result of an increase in prices in the first three days of this week, in week ended 25 January, the liveweight prime cattle trade at GB auction markets strengthened. Steers were three pence dearer at 183.5p per kg, young bulls a penny dearer at 175.3p per kg and heifers leveled at 186.1p per kg. Consumption In the latest 12week period to 25 December, data from Kantar Worldpanel showed that household purchases of fresh and frozen beef fell by nine per cent compared to the same period last year to 74,000 tonnes. However, an 11 per cent increase in the average retail price resulted in expenditure increasing marginally on the year to 483 million. Household purchases of all cuts declined year on year with sales of roasting joints and frying and grilling cuts falling to the greatest extent, down 18 and 11 per cent respectively. The average retail price of beef increased compared to the year earlier as retailers reduced the number of price reduction promotions offered on beef cuts. This further encouraged consumers to switch to cheaper proteins. In addition, December 2010 was a very strong month for beef sales with a significant increase in purchases as a result of the inclement weather conditions. The warmer weather this year has meant that the same level of purchases was not repeated. 2

3 Sheep market trends p per kg dw Deadweight SQQ clean sheep price J F M A M J J A S O N D Source: EBLEX / AHDB Household fresh and frozen lamb purchases 12 week yearonyear changes in volume J F M A M J J A S O O N D Source: Kantar Worldpanel 2012 Estimated GB clean sheep slaughterings 2012 per 100 kg dw J F M A M J J A S O N D Source: EBLEX / AHDB EU sheep reference prices /12 heavy lambs 400 M A M J J A S O N D J F Spain Source: EU Commission UK Source: EU Commission France EU ave Prices The deadweight SQQ in week ended 21 January fell nearly six pence to average 438.5p per kg. At GB auction markets the liveweight trade firmed in week ended 25 January as reports indicated that export demand was stronger from Thursday 19 January onwards. At 202.5p per kg the SQQ was nearly five pence higher than in the preceding week, when prices had been under pressure, as the number of lambs marketed appeared to decline. Cull ewe prices also firmed in the face of some downturn in numbers with the average price increasing by 40 pence per head to Slaughterings In week ended 21 January, at 195,000 head AHDB estimated lamb slaughtering in GB were little changed week. However when compared with the corresponding week a year ago lamb supplies were much tighter. In the year to date estimated slaughterings indicate that lamb throughputs at GB abattoirs have been 13 per cent lower than in the corresponding period a year ago. This decline is likely to be the result of the excellent conditions in which led to stock being finished quicker and the absence of any serious weather disruptions over the winter period preventing any significant carryover of lambs into Consumption According to Kantar Worldpanel in the latest 12 week period ending 25 December household purchases of fresh and frozen lamb totalled 16,500 tonnes, 14 per cent lower than in the corresponding period a year earlier. All cuts of lamb contributed to the decline in purchases. Sales of chops and steaks were down 15 per cent while purchases of lamb mince declined 22 per cent. Previously in, declining roasting joint purchases drove the fall in overall household purchases of lamb, but a good performance over the Christmas period slowed this decline somewhat. Processors continued to command a high export price, which meant reduced domestic availability and less pressure on retailers to promote their lamb offering. As a result, in the 12week period the average retail price increased 14 per cent on the year and expenditure totalled 138 million. 3

4 Pig market trends p per kg dw per 100 kg dw Estimated GB clean pig slaughterings 2012 J F M A M J J A S O N D Source: BPEX / AHDB EU pig reference prices / M A M J J A S O N D J F J F M A M J J A S O N D GB DAPP Source: BPEX / AHDB 2012 Denmark Netherlands UK EU ave Source: EU Commission Household fresh and frozen pork purchases 12 week yearonyear changes in volume J F M A M J J A S O O N D Source: Kantar Worldpanel Prices The sharp fall in prices recorded since the New Year continued in week ended 21 January with the Eurospec DAPP falling by just over two pence to p per kg. This was its lowest level since April last year. educed demand during the postchristmas period is still the main driver of price, coupled with cheap supplies from elsewhere in the EU. Price falls on the continent have been even more pronounced, although they now appear to be stabilising as supplies are reportedly tight. Nevertheless, the DAPP was still almost seven pence higher than a year earlier. Although demand appears to be the main driver of price, supplies have also been high and estimated throughputs so far this year are 14 per cent higher than in the same period of. The quality of pigs this week was unchanged, with the average carcase weight, 80.02kg, and average probe measurement, 11.2mm, identical to the previous week. The market for weaners remains well balanced, with the average 30kg price easing back a few pence to per head in week ending 28 January. Uncertainty about feed prices, which have again risen over the last week, along with the fall in finished pig prices, mean that finishers appear to be reluctant to pay higher prices for the time being. Consumption In the latest 12week period to 25 December, data from Kantar Worldpanel showed that purchases of fresh and frozen pork, increased marginally compared to the corresponding period a year ago to 44,000 tonnes. As a result of a six per cent increase in the average price expenditure increased by the same amount to 212 million. The increase in the average price was largely as a result of reduced promotional activity by retailers in the last quarter of, especially on shoulder roasting joints. Belly and frying and grilling cuts were the drivers of the increased household purchases and have been the focus of retailer s fresh pork promotional activity during the 12week period. Household purchases of pork belly increased 14 per cent, whilst sales of frying and grilling cuts increased one per cent. In contrast, purchases of leg roasting joints declined 17 per cent year on year in December. etailers significantly reduced the amount of promotions offered compared to December

5 GB household beef purchases Fresh and frozen beef 4 weeks ended: 12 weeks ended: 52 weeks ended: 25 December December December 11 Expenditure ( million) ,870.2 annual change % Volume (tonnes) 25,629 73, ,210 annual change % Average price ( /kg) annual change % Penetration (%) Annual volume change % 4 weeks ended: 12 weeks ended: 52 weeks ended: 25 December December December 11 Fresh and frozen beef st quality roasting nd quality roasting st quality stewing nd quality stewing Frying/grilling steak Mince Burgers and grills Chilled ready meals Frozen ready meals Fresh prepacked hot pies Fresh prepacked pasties Frozen pies/puddings Purchase profile 4 weeks ended: 25 December 11 % volume share of all products with a beef content Estimated % beef content Estimated % share of beef volume purchases Fresh & frozen beef purchase profile 52 weeks ended 25 December Other 1% oasting joints 19% Fresh and frozen beef Burgers and grills Chilled ready meals Frozen ready meals Fresh prepacked hot pies Fresh prepacked pasties Mince 51% Stewing 14% Frozen pies/puddings Steak 15% Source: Kantar Worldpanel, derived from a sample of 25,000 respondents 5

6 GB household lamb purchases Fresh and frozen lamb 4 weeks ended: 12 weeks ended: 52 weeks ended: 25 December December December 11 Expenditure ( million) annual change % Volume (tonnes) 6,505 16,476 68,536 annual change % Average price ( /kg) annual change % Penetration (%) Annual volume change % 4 weeks ended: 12 weeks ended: 52 weeks ended: 25 December December December 11 Fresh and frozen lamb Frying/grilling chops Frying/grilling steak Leg roasting joints Shoulder roasting joints Stewing lamb Mince Chilled ready meals Purchase profile 4 weeks ended: 25 December 11 % volume share of all products with a lamb content Estimated % lamb content Estimated % share of lamb volume purchases Fresh and frozen lamb Chilled ready meals Fresh & frozen lamb purchase profile 52 weeks ended 25 December Stewing 5% Steak 15% Other 8% Chops 18% Source: Kantar Worldpanel, derived from a sample of 25,000 respondents Shoulder roast 17% Mince 10% Leg roast 27% (Continued from page 1) year, as consumers switched to cheaper protein alternatives, especially pigmeat and chicken. However, these cuts did perform better intermittently during the year, almost solely when they were heavily promoted by the major retailers. In the first half of mince and stewing beef performed strongly. Both products are relatively cheap, versatile and a key ingredient in component cooking, which has grown inhome during. However, in the last quarter of purchases of mince and stewing beef were lower year on year. In the last three months of the year increased beef exports reduced the domestic supply. Similar to lamb, this reduced the availability of retailers to offer price promotions on fresh beef. In pork benefitted from being the cheapest red meat, in a period where consumers were looking to economise on their food expenditure. Both volume purchases and expenditure increased on the year. In particular, purchases of frying and grilling cuts increased, largely as a result of longterm promotion deals such as 3 items for 10. In pork belly was the best performing cut, purchases increased five per cent on the year. Belly represents a cheap roasting joint alterative which consumers have turned to, from beef and lamb and from other pork roasting joints. 6

7 GB household pork purchases Fresh and frozen pork 4 weeks ended: 12 weeks ended: 52 weeks ended: 25 December December December 11 Expenditure ( million) annual change % Volume (tonnes) 14,267 43, ,659 annual change % Average price ( /kg) annual change % Penetration (%) Annual volume change % 4 weeks ended: 12 weeks ended: 52 weeks ended: 25 December December December 11 Fresh and frozen pork Pork belly Frying/grilling chops Frying/grilling steak Leg roasting joints Loin roasting joints Shoulder roasting joints Bacon Pork sausages Fresh prepacked pork pies Fresh prepacked sausage rolls Chilled ready meals Sliced cooked meats Purchase profile % volume share of all products with a pig meat content 4 weeks ended: 25 December 11 Estimated % pig meat content Estimated % share of pig meat volume purchases Fresh and frozen pork Fresh & frozen pork purchase profile 52 weeks ended 25 December Leg roast 14% Other 9% Belly 9% Chops 15% Bacon Sausages Sliced cooked meats Mince 3% Fresh prepacked pork pies Fresh prepacked sausage rolls Chilled ready meals Source: Kantar Worldpanel, derived from a sample of 25,000 respondents Shoulder roast 16% Loin roast 6% Steak 28% 7

8 Auction market prices Week ended: (p per kg lw) England and Wales Numbers Price Pence change Scotland Numbers Price Pence change Steers Light ( kg) Medium ( kg) Heavy (over 650 kg) All steers 1, Heifers Light ( kg) Medium ( kg) 1, Heavy (over 590 kg) All Heif ers 2, Young bulls Light ( kg) Medium ( kg) Heavy (over 650 kg) All young bulls 1, Al l prime cattle 4, Cull cows Grade Grade Grade Grade Dairy sired (ungraded) Beef sired (ungraded) 1, Old season lambs Light ( kg) 4, Standard ( kg) Medium ( kg) Heavy ( kg) Others (over 52.0 kg) Standard Quality Quotation (SQQ) 19, , , , , , , , , Total ewes ( per head) 22, , Pigs All Pigs Porkers (6075 kg) Cutters (5685 kg) Baconers (86104 kg) Others (over 104 kg) Cull Sows Prices collected by AHDB Market Intelligence from auction markets 8

9 Deadweight Pig Prices Week ended: 21/01/2012 (p per kg dw) GB DAPP (EU) (a) GB DAPP (UK) (b) Price Pence change Dec on month on year Deadweight sow price Average weight (kg) of GB clean pigs in sample: All sample pigs on EU dressed basis All sample pigs on UK dressed basis Average probe (P2) of GB clean pigs in 11.2 Number of clean pigs in sample in GB 75,560 p per kg dw Pence change Northern Ireland Average Pig Price Prices by method and weight range EU spec up to 59.9kg kg kg kg 90.0kg and over All pigs Method 1 and Method 2 England & Wales Pence change Great Britain Pence change GB prices by weight and lean meat percentage EU spec Method 1 and Method kg kg kg Over 90 kg Estimated Lean Meat Percentage 60 and over All pigs UK prices by EC grades EU spec Grade S Grade E Grade U Grade Grade O Grade P Prices collected by AHDB from a sample of abattoirs. Weaner spot prices (30 kg) Week ended: 28/01/2012 ( per head) GB Weighted Average change Dec Price 2012 on month on year Please note the monthly weaner price has been recalculated to match the statistical period. na = not available, nc = no comparison Data collected by AHDB from a sample of marketing groups. 9

10 Store cattle prices earing calf prices Week ended: Week ended: ( /head) Number sold Average price Price change ( /head) Number sold Average price Price change Continental cross: Yearling steer 1, Fresian/Holstein bulls Yearling heifer Hereford cross bulls month old steer Hereford cross heifers month old heifer Continental cross bulls year old steer 618 1, Continental cross heifers year old heifer Prices collected by AHDB Market Intelligence from auction markets Deadweight sheep prices Week ended: (final) prices based on MLC Standard Dressed Carcase (p per kg dw) Old Season Lambs Old Season Lambs Weight range 12 16kg 2 3L 3H Weight range L 3H 21.5kg U U O O Old Season Lambs SQQ ( ) Prices collected by AHDB from a sample of abattoirs GB slaughterings AHDB estimates ( 000 head) Week ended Dec 2010 (4week month) Dec Jan/Dec 2010 (52week year) Jan/Dec on year Steers Heifers Young bulls Steers/heifers/young bulls , , Cows and adult bulls na na Calves na na Ewes and rams na na , , Other sheep and lambs , , Sows 5 5 na na na na na Clean pigs , , Source: Defra /AHDB 10

11 Deadweight cattle prices Week ended: (p per kg dw) All steers Average all steers Total numbers Southern ,002 England and Wales Central ,025 Northern ,610 Scotland ,584 All heifers Average all heifers Total numbers , , , ,299 All young bulls Average all young Bulls Total numbers All cows Average all cows Total numbers , , Great Britain All steers All heifers All young bulls All cows Total numbers 12,221 8,508 1,453 4,537 Average price Pence change on week Dec on month on year England and Wales All steers All heifers All young bulls All cows 8,637 5,209 1,168 3, Prices collected by AHDB Market Intelligence from sample of abattoirs. All price quoted on the basis of UK spec 11

12 etail prices Week ended: England and Wales Scotland ange Average Pence ange Average Pence Beef change Price change (p per kg) (p per kg) Topside 5491, Topside 7971,390 1, Sirloin Steak 1,4492,598 1,950 9 Sirloin Steak 1,4493,200 2, ump Steak 8801,790 1, ump Steak 1,1111,950 1, Fillet Steak 2,2005,000 3,081 8 Fillet Steak 2,5594,600 3,482 2 Diced Stewing Steak Diced Stewing Steak 6091,290 1, Braising Steak Braising Steak 8491,290 1, Premium Mince Premium Mince 4751, Standard Mince Standard Mince Prices collected by AHDB from a sample of retailers Week ended: England and Wales Scotland ange Average Pence ange Average Pence Lamb Price change change (p per kg) (p per kg) Domestic Whole Leg 7491,480 1, Whole Leg 9201,560 1, Fillet End Leg 7491,698 1, Fillet End Leg 9201,800 1, Shoulder (Bonein) Shoulder (Bonein) Shoulder (Boneless) 6561, Shoulder (Boneless) 6991,299 1,120 6 Lamb Steaks 9402,248 1, Lamb Steaks 1,3993,140 1, Loin Chops 9901,984 1, Loin Chops 1,2002,280 1, Double Loin Chops 9901,984 1, Double Loin Chops 1,4002,280 1, Cutlet chops 8801,984 1, Cutlet chops 1,2002,280 1, Diced Lamb 5501,687 1, Diced Lamb 1,0991,540 1, Minced Lamb 5501, Minced Lamb 6601,540 1, Imported Cutlet Chops 9901,299 1, Cutlet Chops 1,2501,250 1, Fillet End Leg 8491,149 1, Fillet End Leg 1,0991,149 1, Loin Chops 7991,549 1, Loin Chops 1,5491,549 1, Shoulder (Bonein) Shoulder (Bonein) Prices collected by AHDB from a sample of retailers Week ended: England and Wales Scotland ange Average Pence ange Average Pence Pork Price change Price change (p per kg) (p per kg) Leg (Boneless) Leg (Boneless) Fillet End Leg Fillet End Leg Shoulder (Boneless) Shoulder (Boneless) Fillet of pork 4381, Fillet of pork 8991,599 1, Loin Steaks Loin Steaks 5681, Loin Chops Loin Chops Diced Pork Diced Pork Minced Pork Minced Pork 4421, Sausages Pork (Traditional) Pork (Traditional) Prices collected by AHDB from a sample of retailers ed Meat MI AHDB, Stoneleigh Park, Kenilworth Warwickshire, CV8 2TL tel: fax: redmeatmi@ahdb.org.uk ISSN Agriculture and Horticulture Development Board All rights reserved. While the Agriculture and Horticulture Development Board, operating through its EBLEX/BPEX divisions, seeks to ensure that the information contained within this document is accurate at the time of printing, no warranty is given in respect thereof and, to the maximum extent permitted by law, the Agriculture and Horticulture Development Board accepts no liability for loss, damage or injury howsoever caused (including that caused by negligence) or suffered directly or indirectly in 12 relation to information and opinions contained in or omitted from this document.