New data sheds light on unique year for meat industry
Hybu Cig Cymru – Meat Promotion Wales (HCC) has published its review of 2020 which looks at the key trends of supply and demand in a highly unusual year dominated by Covid-19 and Brexit.
According to the trade body’s market bulletin for December, market prices for sheep and beef cattle in Wales went through a very turbulent period in the Spring as initial lockdowns and closure of foodservice outlets hit, but thereafter recovered to record consistently strong prices in the summer and autumn.
As of mid-December, liveweight prime cattle prices at market were down slightly from their peak to average 211.3p per kg, over 27p higher than the corresponding period in 2019, and 19.7p above the 5-year average. Lamb prices stood at 215.2p per kg, 27.2p higher than year-earlier levels, and over 44p higher than the 5-year average.
According to the HCC analysis, these shifts during 2020 were caused by a unique combination of factors. Domestic retail demand for beef and lamb remained strong, helping to offset some of the loss of foodservice trade. This was also helped by fewer imports and consumers’ positive response to marketing campaigns designed to inspire them to cook more adventurous meals at home. Exports to Europe recovered better than anticipated, as processors and exporters were able to supply Welsh Lamb quickly into European markets as they re-opened, and this trade was also helped by a favourable exchange rate.
“The support from domestic retailers and consumers – as shown by large increases in purchases of lamb and beef including strong demand for premium and cheaper cuts – has been a great help to the sector in 2020.”
These patterns are reflected in unusual throughput statistics. UK cattle slaughtering’s were higher than usual in March through to August, but lower at the beginning and end of the year due to tighter supplies. Sheepmeat throughput reached a high peak in July; figures have consistently shown lower than usual slaughtering’s of adult sheep, indicating that the breeding flock is not contracting significantly despite Brexit-related uncertainty over the future of the sector.
Pig prices have been falling steadily since their high-point in July, largely due to instability in the global market in mainland Europe and Asia related both to Covid-19 and African Swine Fever.
HCC’s industry development and relations manager, John Richards, said that a range of unique and complex factors were responsible for the strong livestock prices in the second half of 2020, and that the outlook for 2021 was very difficult to predict.
“The support from domestic retailers and consumers – as shown by large increases in purchases of lamb and beef including strong demand for premium and cheaper cuts – has been a great help to the sector in 2020, making up for the huge disruptions in the hospitality and catering industry.
“A combination of a favourable exchange rate and our ability to respond quickly to recovering demand in Europe and the Middle East has also helped the Welsh lamb sector in particular. Exports to some countries such as Italy and the UAE are actually well up on 2019.”