Pork prices are critically high. Significantly fewer pigs have come through compared to last week and the same week the previous year.
Domestic demand is reported to be high with increasing concerns that export demand will be high. This, coupled with supply remaining tight, continues to increase prices by over 10%. Pork exports from the UK last year broke all records with over 378,000 tonnes exported, putting a strain on the home market with fewer imports adding to the situation.
Prices are expected to remain extremely high. With uncertainty on pricing going forward, surrounding critical global factors such as African Swine Flu and the effects of coronavirus, price decreases are not likely in the short to medium term, with further increases forecasted.
So far this week, product seems to be coming back into the catering sector, but pricing is still volatile. An example of this is beef mince trim where we have seen a 25% difference in cost prices in different parts of the country and lamb legs with a staggering 35% difference in pricing.
Overall, steer prices rose 2.3p/kg on the previous week. Carcases meeting the R4L specification moved up too, but by less, some 1.4p to 347.0p/kg. Heifer prices were up too, gaining 1.3p/kg on the week to average 336.8p/kg. Similar to steers, carcases meeting R3 and R4L spec were up by a lower 0.5p/kg. Overall prices for young bulls were up 0.5p/kg, whilst there was a drop in the price of R3 spec but this was more than outweighed by a 4.6p/kg increase in the R4L category.
Last week, we saw increases of 25% plus on beef forequarter cuts. Pricing remains firm with slight movement upwards. This was caused by panic buying in supermarkets. These retailers then went into the catering and other sectors to purchase all goods that they could to keep the shelves full, causing a supply and demand situation. Cutting plants are currently costing the animal out – so, if they need to, they can put steaking cuts into diced products (which is unheard of normally).
Beef exports have started the year at a relatively solid pace, but perhaps mask the challenges that lie ahead with potential market disruptions in large customer countries like China, with an
expected rise over the coming weeks.
Compared to previous market prices, liveweight prices bounced back this week. During the week ending 4 March, the GB OSL liveweight SQQ increased 3.5p, to 238.39p/kg. Prices continue to trend well above average. Throughputs for the week totalled 107,000 head, up week-on-week by 5,000 head.
Much like beef, lamb legs particularly were in short supply due to customers panic buying. The continued challenging weather situation is encouraging numbers forwards, according to industry reports. Other industry reports suggest the amount of lamb that may come to Europe is in doubt, with the global shipping market clogged up with little movement, due to the situation in China with coronavirus.
Meanwhile, the GB deadweight market reflected the previous week’s liveweight market. The GB deadweight SQQ slipped almost 2p/kg in the week ended 29 February, to 530.3p/kg. Despite this, price remains the highest level on record for the time of year and is around a £1 above the 5-year average.
With lamb prices rising significantly since December, over 18%, due to weather conditions in the UK and lack of imports, we strongly suggest removing or limiting the use of lamb till pricing returns to an acceptable level for your business needs.
Poultry is best placed to fill the huge gap in pork availability and world productions will increase by more than 10% in 2020. Asian needs are compounding the rising world demand for poultry of around 1.7% per year due to the growth of consumption in developing countries such as India, Pakistan and Indonesia. This high demand is partly met by the increase of production in exporting countries such as Brazil, USA and the Ukraine. Chicken and fillets were particularly short on product and in some cases up 35%.