Agriculture and Horticulture Development Board (AHDB) forecasts presented this year have consistently indicated that 2017 will be a year of relatively robust prime cattle availability. This prediction is largely based on data from the British Cattle Movement Service (BCMS) and as 2016 draws to a close it is worth taking a more detailed look at what cattle numbers on the ground look like.
According to BCMS data in October, all categories of cattle in the prime slaughter age range, which are likely to come forward next year, had higher numbers on the ground, compared to the corresponding time last year. In total, the number of cattle between 12 and 24 months of age was over 65,000 head up on the year earlier.
Cattle in the 18-24 months of age range accounted for by far the greatest share of the increased figures and the number on the ground was up around 50,000 head year on year. This signals that the market is likely to be better supplied earlier in the year than later on, producers continue to be under market pressure to finish their cattle under 30, or even 24 months of age. With the exception of dairy males, all categories of cattle had increased numbers.
While cattle between 12 and 18 months of age accounted for the remaining uplift in the overall position, there was a clear divergence in trend between dairy and beef types. Beef males were back around 3,000 head year on year, while beef females were down over 8,000 head. In contrast, the number of dairy female cattle in this age range was up over 10,000 head on the year. While some may be intended for the breeding herd, many will be destined for beef production. In addition, the number of dairy male cattle on the ground between 12 and 18 months of age was up over 17,000 head on October 2015. Given that the production opportunities for these cattle are maximised before 16 months of age, and that most are finished before 18 months of age, this further adds to the prospect of stronger supplies in the early part of next year.
Limousin genetics are dominant for beef bred cattle. They account for about 20 per cent of all calf registrations each year. In October, the number of Limousin cattle between 18 and 24 months of age was up over 5,000 head on the year earlier. Other main continental breeds also recorded higher numbers on the ground in the same age range, for example, Charolais numbers were up 4,000 head. However, of greater interest, native beef types have steadily increased their prevalence over the past few years as retail interest in them has grown. The current analysis indicates that the largest part of the growth in the number of cattle between 18-24 months of age in October came from these types; Aberdeen Angus numbers were up 10,000 head on last October while Hereford’s were up over 6,000 head on the year. With the Angus market having been firm in recent weeks against a steady prime trade in general, given the time of the year, it is clear that processors have still been paying a premium for cattle that match their specific requirements for these types, despite the increased numbers in the pipeline.
Looking ahead, calf registrations overall in 2016 have again been ahead of the previous year, as they were for 2015 as a whole. Consequently, the number of cattle on the ground in October under 12 months of age was up around 13,000 head on the year earlier. However, what is notable this year is the change to developments seen over the past couple of years, in that dairy registrations have started to trend lower. Consequently, this means that the increase in the number of younger cattle on the ground is entirely beef driven. On the dairy side, if not linked to a fall in cow productivity, this could well be an early signal of decisions made by producers to exit the industry, albeit well over a year ago. The number of dairy female cattle under 12 months of age on the ground was back 20,000 on October 2015 while dairy male numbers were back over 26,000 head. Despite the better feed outlook, producers seem to have not been encouraged into retaining these animals for finishing next year and thereafter. This development could well continue, following the decision by a major processor to downscale and eventually end its procurement of young beef bulls.
While analysis of the BCMS data gives a signal of availability, as always, the evolution of the trade will be very dependent on developments on the retail side of the equation, as well as for imports and exports. While consumer interest in beef over the Christmas period is likely to be keen, there has been no significant impetus driving farmgate prices upwards. Processors have still been able to generally keep a lid on prices, still securing the cattle they need while managing stocks carefully.
With dairy cullings expected to be lower next year and lower carcase weights offsetting modestly higher prime cattle numbers, beef supplies overall are forecast to be lower. As such, the prospects for the sector are still improved from where they were earlier this year, especially given that the sterling/euro exchange rate is likely to remain in our favour on both sides of the trade equation. However, despite this, the focus on specification, whether it be movement, weight, conformation or age is still likely to be very prevalent in the trade.