Sheep Market Outlook. Mark Kozlowski, AHDB Beef & Lamb AHDB Outlook Conference 9 February 2016

Transcription

1 Sheep Market Outlook Mark Kozlowski, AHDB Beef & Lamb AHDB Outlook Conference 9 February 2016

2 Overview Current situation UK Current situation rest of the world UK outlook Wildcards

3 Current situation in the UK

4 p/kg liveweight UK prices below year earlier levels for most of 2015 Increases seen recently Better than expected start No seasonal peak Eid Chart: GB liveweight lamb price Source: AHDB Market Intelligence; LAA; IASS 5 yr ave

5 p/kg liveweight October prices lowest since Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Standard Quality Quotation 12 month moving average Chart: GB liveweight lamb price Source: AHDB Market Intelligence; LAA; IASS

6 000 tonnes UK sheep meat production increased in 2015 overall production up 1% Chart: UK sheep meat production Source: Defra

7 000 heads UK lamb slaughterings in 2015 were higher than in but fell back in Q Eid Earlier Easter Large carry over of lambs from Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Year on year change in lamb slaughterings Chart: UK lamb slaughterings Source: Defra

8 Fewer lambs sold at liveweight have fallen within the SQQ weight band 100% 95% 90% 85% 80% 75% 70% 65% 60% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Five year average 2016 Chart: Percent of liveweight lambs within SQQ weight band Source: AHDB Market Intelligence; LAA; IASS

9 000 heads UK ewe slaughterings below year earlier levels for much of Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Chart: UK adult sheep slaughterings Source: Defra

10 / Strength of the pound influenced trade in Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Chart: Sterling vs Euros Source: Pacific exchange rate service

11 000 tonnes UK exports fell in first 11 months of but doubts over the accuracy of the data Shipments held at ports Exporters reluctant to send Protests by French farmers Operation Stack / exchange rate Chart: UK sheep meat exports Source: GTIS; HMRC France Germany Ireland Belgium Hong Kong Others

12 000 tonnes Overall UK sheep meat imports were lower in the first 11 months of volumes from NZ actually increased 4% /NZ$ exchange rate Lower volumes to China Higher production New Zealand Australia Ireland Others Chart: UK sheep meat imports Source: GTIS; HMRC

13 /kg Due to exchange rates UK imports from New Zealand have been cheaper Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Chart: Unit value of UK imports from New Zealand Source: GTIS; HMRC 5 yr ave

14 000 tonnes Total supplies for consumption in the UK have increased Production Imports Exports Supplies for consumption Chart: Estimated UK sheep meat supplies Source: AHDB forecasts based on information from HMRC and Defra

15 000 tonnes Retail sales level over the year but have been higher since September Good Easter trade Summer sales were poor Sales have improved since September 4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Chart: UK retail sales of lamb Source: Kantar Worldpanel

16 Current UK situation summary Prices in 2015 have been low compared to recent years More recently prices have been increasing Production in 2015 was above 2014 However production declined in Q Less sheep meat was imported to the UK Tough export conditions have led to a fall in shipments from the UK

17 Rest of the world

18 Million head New Zealand lamb crop fell in 2015/16 season Lowest crop in almost 60 years 1.7 million lower than 2014/15 Due to drought and small breeding flock / / / / /16 Chart: New Zealand lamb crop Source: Beef and Lamb New Zealand

19 Wk-1 Wk-3 Wk-5 Wk-7 Wk-9 Wk-11 Wk-13 Wk-15 Wk-17 Wk-19 Wk-21 Wk-23 Wk-25 Wk-27 Wk-29 Wk-31 Wk-33 Wk-35 Wk-37 Wk-39 Wk-41 Wk-43 Wk-45 Wk-47 Wk-49 Wk-51 Head New Zealand slaughter schedule earlier 900, , / / /16 Though, exactly when it will fall is disputed 700, ,000 Before falling sharply 500, , , , ,000 0 High slaughtering is expected to continue to cover the Easter trade Chart: New Zealand lamb slaughterings Source: New Zealand Meat Board

20 000 tonnes Australian sheep meat production is forecast to decline Lamb Mutton Chart: Australian sheep meat production Source: MLA

21 EU sheep meat production continues to fall 0.5% 0.0% -0.5% -1.0% -1.5% -2.0% -2.5% -3.0% -3.5% -4.0% Ireland Spain France Italy Romania EU 15 Chart: year on year percentage change in sheep meat production Source: EU commission

22 000 tonnes Lower Chinese imports in High stock levels High levels of domestic production Cheap pork New Zealand Australia Uruguay Chile Chart: Chinese sheep meat imports Source: GTIS; China customs

23 Rest of world summary New Zealand's lamb crop in 2015/16 is its smallest for almost 60 years Production in New Zealand higher earlier in the season but expected to fall Australian production is expected to be lower in 2016 Production in the EU has been falling for the past few years Chinese demand declined in 2015; not expected to recover until late 2016

24 UK Outlook

25 Million head Forecasts based on size of the December breeding flock from Defra figures 16.0 Official figures AHDB forecasts Chart: UK breeding flock Source: Defra and AHDB forecasts

26 Changes to breeding flock normally reflected in lamb crop 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% -6% Change in previous years breeding flock Change in lambs in June Chart: change in UK breeding flock and following lamb crop Source: Defra

27 Million head Previous forecasts for lamb slaughter revised downwards Q Q Q Q Q Q Q Q Q Q Q Q Previous forecasts New forecasts Chart: UK lamb slaughter forecasts Source: Defra and AHDB forecasts

28 however lamb slaughterings are likely to remain higher in % 4% 2% 0% -2% -4% -6% -8% -10% -12% Chart: year on year change in UK lamb slaughtering Source: Defra and AHDB forecasts

29 Million head Adult slaughterings are expected to increase in Chart: UK adult sheep slaughter forecasts Source: Defra and AHDB forecasts

30 kg Carcase weights expected to fall but stay above the 5-year average Q1 Q2 Q3 Q4 5 year average Chart: UK lamb carcase weights Source: Defra and AHDB forecasts

31 000 tonnes Overall production in 2016 is forecast to rise Chart: UK sheep meat production Source: Defra and AHDB forecasts

32 000 tonnes change UK imports forecast to rise in Q1 before falling back for rest of Q Q Q Q Q Q Q Q Chart: year on year change in UK sheep meat imports Source: HMRC and AHDB forecasts

33 000 tonnes Overall UK imports should fall in Chart: UK sheep meat imports Source: HMRC and AHDB forecasts

34 000 tonnes change Export volumes are expected to increase in Q Q Q Q Q Q Q Q Chart: year on year change in UK sheep meat exports Source: HMRC and AHDB forecasts

35 Change 000 tonnes Total supplies for UK consumption to continue increasing in Production Imports Exports Supplies for consumption Chart: Estimated UK sheep meat supplies Source: AHDB forecasts based on information from HMRC and Defra

36 Wild cards

37 Weather

38 p/kg (deadweight) Exchange rates will continue to influence the UK lamb price Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2015 (actual exchange rate) 2015 (exchange rate at June 2014) 2014 Chart: UK deadweight sheep price and potential price based on June14 exchange rate Source: HMRC and AHDB forecasts

39 Disease Disease will continue to be a risk with all forms of livestock Blue tongue outbreaks in France have led to movement restrictions for much of country Bluetongue also in Romania

40 UK forecasts summary Higher UK production in 2016 Driven by lower retentions and increased ewe culling UK production to fall back in 2017 Production difficulties in NZ Lower UK imports More favourable export conditions Disease, currency and weather wildcards could change this

41 UK forecasts summary continued The expected increase in supplies will put pressure on prices However anticipated improving retail sales and more competitive exports could give them some support Making sure lambs are marketed when they are at target spec will help producers ensure maximum returns

42 Thank you Mark Kozlowski Phone: Twitter: mkozlowski1