Meat Market Report for May and June 2008
BEEF
General Beef Market
The continuing crisis in South America continues into the 5th month of 2008, and despite the best efforts of the UK, Beef is starting to reach a crisis point for certain cuts, particularly Steak Meat; the UK has seen a drop in Prime Cattle supplies of around 4%, with Ireland falling by as much as 10%. This coupled with Brazil and Argentina’s issue has tightened the supply grip further on Beef overall.
Uruguay remains an option for South American Beef, however, their prices are now equal to that of the Argentine prices, and Germany seem to is currently enjoying a feast of exports, along with the Russian markets.
Limited amounts are available from Europe, Australia, and Africa, but there is nothing that can replace the level of volume taken from South America (Brazil).
The Retail sector will also continue to demand price stability; along with their “UK Only” marketing campaigns, increasing demand for UK product, and further reducing availability to the Foodservice sector.
In summary, Beef prices will move upwards between 11% and 22% dependant on specific cuts and availability during the months of May & June.
LAMB
General Market
The impact of the Beef sector continues to impact the price of Lamb during the second quarter of 2008; as previously reported, Lamb is already out of line with seasonal expectations, and the demand for Lamb continues to increase year on year.
“New Season” increased the sector by as much as 40p per kilo from certain farms, and UK Lamb has increased more significantly than that of the NZ/Australian product.
UK prices are likely to continue to rise, seeing specific “Catering Butchers” quoting Australian or Mutton prices, based on UK Lamb specifications and codes, just to obtain a competitive edge for business tenders. Customers, and consumers need to be aware of this practise when managing tender processes, and benchmarking.
In summary, Lamb prices will continue to move upwards between 4 & 8%, dependant on origin.
PORK
General Market
Pork prices continue to remain firm, along with availability within the UK Market. Certain product still remains a little short in the EU, with prices being kept fairly high, which in turn will continue to impact on prices of pork and bacon products with in the UK. Whilst the increases have not been as significant as those in the UK, it still looks likely that availability will reduce, and as such increase the market price accordingly
The predicted MLC & DEFRA reports of increases around 7-9% during March & April in the UK Market were proven correct; the rising price of wheat and soft commodities by as much as 100% has severely impacted on farmers.
In summary, Pork prices will continue to move upwards around 5 & 9% during May and June, dependant on origin.
POULTRY
UK/EU Market
Poultry prices taken a significant upward turn over the last month; prices have increased on specific cuts by 11% in one week of April 2008. This is a concern for the market in general, with Poultry being the “main-stay” commodity for the Foodservice Market
The increase of wheat and in particular fuel prices continues to impact on the Poultry market, although availability remains positive. Prices will continue to rise in the first half of 2008, but not the extent of the Red Meat sector, providing availability remains firm.
The Retail focus continues to remain on price, and promotional volume; inevitably this has lead, as predicted in April’ report lead to “non-retail” customers seeing price movement during specific purchasing periods in 2008.
In summary, Poultry prices could move as high as 12% dependant on category, cut and origin.
General Market Summary (into May 2008)
The Foodservice customers, and consumer will need to remain flexible over the coming months; fuel increases over the last 2 weeks, wheat prices, as well as the packaging, and the minimum wage reported in April’ report continue to burden the supply base, and overhead cost management with Catering.
Again, we repeat the message NACB Chairman’s Report of March 2008; customers and consumers need to be aware that not all Meat and Meat Associated suppliers will provide the product type suggested on some of their more “competitively priced” quotes. It is easy to quote a cheap price, it is far more difficult to supply the actual product at the price proposed.