20 Jul 2017
TIGHTER CATTLE SUPPLIES THAN FORECAST FOR SECOND HALF OF 2017Cattle
Beef production and cattle numbers for the second half of 2017 will be much less that originally forecast, according to IFA National Livestock Chairman Angus Woods who said this paints a much more positive picture on the beef trade for the remainder of 2017.
There are three key factors impacting to lower beef production and numbers for the second half of 2017. For the first six months of the year, the kill is already up 40,000 head. These cattle are now slaughtered. Carcass weights are down significantly, by 8.2kg on steers alone, and across all categories of stock lower weights will result in the equivalent of a 30,000 head reduction in numbers. Live exports are running 43,500 head higher than last year.
At the start of the year, Bord Bia forecasted an increase in finished cattle supplies of 100,000 head on 2016. This forecast was based on AIMS data and the combined impact of an increase in calf registrations and a reduction in live exports in 2015 and 2016. However, the changes due to the increased kill to date, lower carcase weights and the increase in live exports all mean production and numbers for the second half of 2017 will be much lower than originally forecast.
There has been a significant reduction in carcase weights for the first five months of this year, with steer weights down 8.2kgs and heifers back 4.3kgs (Table 1). Angus Woods said, “If these carcase weight reductions are maintained for the full year, it will amount to a reduction of almost 10,000t of beef or the equivalent of a fall of 30,000 head in cattle numbers.”
In addition, Angus Woods pointed out that the kill to-date (8/7/2017) is up 40,000 head and live exports are up 43,500 on last year. While a lot of the increase in live exports are calves, the continuing export of young bulls to Turkey and other markets will take from slaughterings at the back end of this year. It is estimated that live exports will reduce the kill by 30,000 head (Table 2). When this is combined with the lower carcase weights and the increased kill to-date, the impact will be that the original forecast of a 100,000 head increase in slaughterings will be completely wiped out.
Angus Woods said that at a recent meeting of the EU Commission that he attended in Brussels, it was reported that EU consumption is up 1.5% and production is down by 0.5%. Market demand is very strong and there is no beef in store. Beef prices in our main export market in the UK have risen each week for the last 15 weeks in a row and are currently at the equivalent of €4.53/kg. He said these price increases outweigh any change in the sterling exchange rate.
The IFA Livestock leader said the clear message from the recent Beef Forum meeting on the trade was that beef markets are in a strong position and there is no basis for any pressure on cattle prices, “Both Bord Bia and the factories confirmed the positive position on the beef markets and Minister Creed said live exports were performing very well, up 43% to date this year, which he described as very positive.”
|Table 1. Impact of Lower carcase weights.|
|Category of animals||2016 Slaughter Numbers||Reduction (kg/head) in Carcase weights (Jan – May 2017) as per AIMS||Reduction in tonnes of carcase beef on an annual basis|
|Table 2 Change in supplies due to increased kill to-date, lower carcase weights and live exports.|
|Forecast increase in 2017 kill||+100,000|
|Increase in kill to date (8/7/2017)||-40,649|
|Impact of lower weights(9,791t x 3 animals/tonne)||-29,373|
|Impact of live exports 2017||-30,000|
|Total estimated change||-100,022|
|Overall equivalent increase in 2017 numbers||+22|