Latest Coronavirus updates from the idc team
Even though the Covid-19 pandemic is very unsettling, idc continues to operate as normal, with a fully operational supply network across the UK.
We are in constant contact with all fresh food supply partners and below are our market updates for the most recent period.
For most of our dairy supply partners, May has been a very tough month with volumes on vehicles still reducing. Prices still look set to rise further on key dairy lines for the foreseeable future, with further updates planned throughout the coming months.
Prices are still set to continue to rise over the next few months with farmers experiencing cost increases in animal feed and additives. However, after a sluggish start to the growing season, grass growth seems to be more positive, so this will help with farmers costs with delayed payments from some of countries processors.
The dairy sector has faced a crisis due to COVID-19 and continued campaigning by the sector has led to the government offering English dairy farmers a support package of £10,000 each or up to 70% of their pre-COVID-19 income. This has been welcomed by the sector as the huge drop in demand and delayed payments from customers and wholesalers has placed the producers under considerable financial strain.
Another impact of the Covid-19 situation is line capacity. Milk processing capacity in the country relies on all factories running without incident. A site breakdown, particularly if repairs are difficult to source because of the lockdown, can significantly reduce our processing capability and lead to an increased risk of excess milk needing to be disposed of.
Pork: Prices continue their upward trajectory and pricing is still 17% above the 5-year average and 14% higher than the same week last year. Prices look set to
remain at these high levels for now with slight increases weekly as we have been seeing over the last month or so.
Beef: The closure of hospitality is most markedly seen in the imbalance in demand for the whole carcass for meat – leading to an oversupply of steak cuts.
Consumers have begun to see this in the supermarkets with some staggeringly low steak prices being offered. Overall, pricing remains firm with reports suggesting that there could be a rise in the price of forequarter (mince, diced, brisket) and round cuts (topside & silverside) in the near future.
Lamb: Prices gain slightly as we move from old season lambs (hoggets) to new season lamb.
Poultry: Pricing remains stable but firm with no movement from last week. Industry reports suggesting we could see some rises in the coming weeks,
especially if schools reopen on a significant scale.
As we move into June, we’re seeing price increases diminish due to a reduction of panic buying and a recovery in the availability of produce. However, the sector continues to have a tough time due to the lack of trade caused the near closure of the education sector and the total closure of the hospitality industry – leading to reduced delivery days and an increased number of supply partners ‘hibernating’.
A further source of concern is the lack of overseas labour currently available in the UK which has traditionally provided the majority of the ‘picking’ force for the UK harvest. The government has created the website “Pick for Britain” which intends to channel furloughed workers towards available picking jobs – although the success of this is yet to be seen.
Broccoli has been at a startlingly high price for the last few months. Fortunately, the start of the UK season and increased supply from Spain have resulted in prices moving to a level which is much closer to normal for the time of year.
Cauliflower pricing still remains high as the UK main crop has not yet started and we would advise buying these by the kilo or box rather than the each due to the small head size.
Raspberries, blackberries, lettuce, asparagus and cucumber have all eased in price from June as the UK crop has now come in. Likewise, peppers, courgettes, grapes, tomatoes and potatoes (bakers) are returning to fairer market prices.
• Spring greens
• Candy and Golden Beetroot
• Little Gem, Cos, Lollo Rosso, Oakleaf lettuce
Buy with care:
• Apples – Bramley and Granny Smith (Stored since Sept’ 2019)
• Citrus – Grapefruit, Lemons, Nectarines, Clementine’s and Satsuma’s (Southern Hemisphere)
• Root Veg – Parsnips, Swede and Turnips
• Pears – Southern Hemisphere (South Africa and Chile)
The dairy markets have remained largely unchanged over the last week and there are no reports of milk not been collected from the farmers. Most of the excess milk in the country is being used in storable products, rather than being poured away, which is of course positive, but in some areas of the country farmers are still being asked to reduce their milk levels by up to 5%.
The dairy industry is waiting to hear what the government’s plans will be about social distancing and its plans to let business re-open over the next few weeks. This will have a massive impact on the industry and allow workplace canteens and coffee shops to start ordering dairy products again. We anticipate that these sites will be very cautious in ordering so that they minimise the amount of potential waste.
We should also be mindful that the milk processing capacity in the country relies on all factories running without incident. A site breakdown, particularly if repairs are difficult to source as a result of the lockdown, can significantly reduce our processing capability and lead to an increased risk of excess milk
needing to be disposed of by the country’s dairy farmers.
For most of our dairy supply partners, May will be a tough month with volumes on vehicles still reducing. Prices still look set to rise further on key dairy lines for the foreseeable future.
Pork prices are unchanged from last week’s slight movement upwards. The price is still 17% above the 5-year average and 14% higher than the same week last year, and prices look set to remain at these levels.
As in the previous few weeks, beef is the major concern, with the imbalance of the carcass. Some supermarkets have started offering steaking meat at highly reduced levels, but the problem persists and with foodservice closures, this looks set to continue. Slaughterings rose by 13 % on last week balancing out the previous downtrend a few weeks ago. Pricing remains firm, with reports suggesting forequarter (mince, diced, brisket etc) and round cuts (topside and silverside) could be moving upwards.
Cow prices increased and slaughter picked up by 3%, with industry reports suggesting that demand for cow meat is strong, with some processors restarting orders again.
Pricing on lamb remains relatively unchanged, with a slight movement up on new season lamb. Throughput was approximately 10,000 down on previous last week; this is to be expected with the switch to new season lamb.
Poultry remains stable but firm with no movement from last week.
Another week of lockdown, and pressures within the produce industry on availability continue. Here is a reminder of our buying advice on what’s good or not so good to buy during the month of May.
The not so good:
Although high in price on some cases, here are some produce of superb quality at the moment, with varying origins:
Strawberries – Kent/UK
Rhubarb – UK
Chard – UK
Sweet Potato – Spain
Hispi Cabbage – Spain
Yellow Round Courgette – Spain
Savoy Cabbage – Spain
Apricots – Spain
Fennel – Italy
Peas – Italy
Despite higher retail sales, overall demand for milk and all other dairy products in the UK is currently running around 2m litres per day lower than it was before the Covid-19 lockdown. This reduced demand comes from lower foodservice sales; in addition processors are still struggling to find a home for excess milk.
During the spring in the UK, factory output is normally driven by processing capacity and milk supply rather than short-term demand. The only additional challenge for dairy processors during the first few weeks after lockdown has been the impact of staff absence. We should also be mindful that the processing capacity in the country relies on all factories running without incident. A site breakdown, particularly if repairs are difficult to source as a result of the lockdown, can significantly reduce processing capability and lead to an increased risk of excess milk needing to be disposed of.
The government is still in negotiations with dairy farmers to see how they can help further with cash flow problems and speed up the Business Interruption Loan Scheme. These are very tough times for the dairy industry as we enter peak production.
For most of our dairy supply partners it has been the same story for the whole of April with volumes on vehicles reducing every week and, in some cases, more and more drivers being furloughed. With the increases we have seen in milk and eggs, we could potentially see other dairy lines rising in the foreseeable future. We will continue to support the industry and our dairy suppliers, delivering the best option for our customers.
Pork supplies continue to be tight whilst prices have gone up slightly since last week – although numbers are approximately 7,000 head below average for the week.
Beef remains the biggest concern with the imbalance of the carcase. Prices remain highly influenced by foodservice closures and there are no signs of the present situation changing. Mince, dicing and round cuts are tight this week, with short weeks previously they are still holding their upward pricing. Steaking meat is floundering, as in previous reports, concerns over processor revenues continue with possibilities of lesser production.
Beef slaughterings have improved slightly on the previous week but are still lower than normal.
Hogget prices remain unchanged, whilst new season lamb prices are up and continue to move in an upward direction. Throughput has increased from last week, however is still low for this season. Throughputs over the coming weeks would normally be expected to drop as the market switches from hoggets to new season lambs.
Poultry has finally stabilized with no movement from last week, again, as in last week’s report, change may happen if production is lowered.
Another difficult week has passed, but it feels like supply has steadied and albeit with some exceptions, prices reflect this.
Certain products are still proving expensive because of either short supply or change in season. These currently include:
However, products that are currently great to buy, with both an affordable price and excellent quality for the season, include: