Concerns in the UK about where cattle prices are going
Unsurprisingly with cattle prices nearing 2014 lows, concerns about the evolution of prime cattle prices in the UK are continuing.
According to EBLEX the all prime average just 7p/kg ahead of the low point in the summer last year comparisons are unavoidable with that period when the supply/demand balance was also very unfavourable for producers.
However, it also says that in contrast to last year, supplies in the UK and Ireland will both start to tighten up as the year progresses, which in the broad picture does offers some support to the market.
However, EBLEX says there continues to be a downside risk, particularly for the shorter term, due to some of the challenges in the highly competitive retail environment and the strength of sterling against the euro.
Irish/UK beef price differential
With Irish prices remaining relatively stable against falling prices in the UK, the price differential with the UK trade has narrowed in recent weeks, according to EBLEX.
In early March it was around 70p/kg, while more recently it is closer to 50p/kg.
Despite this, EBLEX says it is still fairly high in a historical context and consequently is likely to be adding to the pressure on the GB/UK cattle trade as the two markets attempt to move closer to each other.
However, offering better prospects for the UK trade, it cites that Irish supplies are starting to show signs of slowing, meaning that the availability of cheaper Irish product could be on the verge of tightening.