Market Report: Spring 2014

RPI Summary

Annual RPI for March 2014 stood at 2.5%, the lowest since December 2009 down from 2.7% at December 2013 and a whole 1% below the figure for April 2013.

Big movers amongst the commodities tracked were: pork down over 3.5% since December 2013 and fish, in the opposite direction, down over 2.5% for the same period. For the rest, cereals were slightly down, beef and dairy were up (1.2 % and 1.75% respectively)



As a producer of suckled calves, store cattle and some beef in the Welsh hills, times are challenging to say the least. Buyers of store cattle, are facing a very difficult future with rising feed costs to prepare cattle for the abattoir, cutting into their profit margins.

Lower prices achieved by finishing yards have a knock on effect reducing costs per head by £200 less than last year to primary producers like The Yeoman’s Ranch. Hence, breeders of beef cattle are generally considering the viability of their operations and long term future in beef production. Finishers often face long waits to get their cattle into abattoirs. On the occasions we sell our cattle to a small local family owned abattoir, they can experience a seven week waiting time before selling onto slaughter. This of course means cattle are on farm for too long, increasing feed costs, leading to cattle growing overweight, out of the ideal specification for restaurants and putting a serious strain on cash flow. Indications from Hybu Cig Cymru / Meat Promotion Wales are of falling suckler cow numbers and more heifers being killed, meaning less replacement females entering herds in the near future. Concerns raised at a recent board meeting of the HCC/MPW initiated a review of the beef industry. Significant numbers of producers are reducing cow numbers and some leaving beef production all together.

The impending demand for increasing supply of home produced quality beef is in jeopardy. Problems with the spread of Tuberculosis and the general uncertainty within the industry reduce confidence in Welsh beef production are at odds with the reporting of world population expansion increasing at a rate of 228 000 per day. India now has more middle class meat purchasers than USA but despite global demand, the future for British beef production is uncertain. Let us hope consumers wake up to the importance of meat as part of a daily balanced diet before too many producers give up in the UK. If the price to producers does not rise steadily as a response to global demand and guaranteed Welsh beef with full traceability and provenance within the short to medium term future of British beef looks unclear.

John Yeoman – Yeoman’s Ranch


Annual dairy RPI ended March 2014 at 4.2%. Behind February this year (4.9%), this is the second highest since the beginning of this12 month period (April 2013 – 5%).

According to DEFRA, the average UK farmgate price for March 2014 was marginally down on February (6%) at 36.66 pence per litre. However, this is some 12% higher for the March 2013 (stood at 33.66ppl in March. This was a 0.20ppl (0.6%) decrease on the February average price. The March 2014 price was 3.59ppl (12.0%) higher than the same month last year (30.07 pence per litre)

Across the milk range, sterilised milk posted the highest average increase for the year to March 2014, rising to 0.85 pence per litre (11.8% rise). This versus an average increase across all milks of 1.3% to March 2014. Soya milk was the only liquid type to show a fall in average price for the same period.

With regard to production, following the 12 year high in January, UK dairy farmers delivered record levels in February, according the Rural Payments Agency (RPA). Wholesale milk deliveries showed an 11.5% increase on the February 2013 figures at 1,090 million litres.


April saw the UK milk production deliver a massive 14% more milk than that month in 2013, with the spot price of trading as low as 17ppl with our own milk price dropping 1.2ppl. The main concerns at this point for our business was obviously any negative effect on milk price going forward but also the risk that in the last year of milk quotas we could trigger superlevy. As our business is only 4 years old and holds very little quota this would have made for an interesting 12 months! Since then production has dropped off the Spring peak and our milk buyer has held the price for June; milk production could now be affected negatively at ground level by a wet May and June and also the fact that many dairy farmers are making lower quality silage for the coming winter.

Tom Rawson Director – Evolution Farming


Pork annual RPI fell to -4.8% following steady decreases since December 2013 (aside of a small 0.5% increase in February).

Finished pig prices, normally seen to rise in March, have fallen for the fifth consecutive month, driven by a recent outbreak of African Swine Fever (ASF) in the EU causing prices to drop across the continent. UK pork imports in January were up 3% versus 2013, largely due to significantly higher imports from Germany (up nearly a third on last January) accounting for over a quarter of UK imports.

Looking forward, the UK supply market will be highly dependent upon what happens globally with the supply of UK pigs remaining tight for the remainder of the year. As we have seen already, disease could prove to be either a negative, or positive, factor on UK supplies.


As we move into the summer quarter and the barbecue season sales of pork traditionally grow as the sun shines. This year the World Cup and the scheduled times that England games kick off at really lend themselves to barbecues and as such demand for sausages is likely to increase. This in turn will firm up prices for the manufacturing pork cuts such as shoulder, collar and trim.

Exports continue to grow especially to Asia where demand is now moving towards primal cuts which will firm prices domestically. Multiple retailer stocking commitments for domestically produced pork and pork products may continue to put pressure on the foodservice supply chain and we advise catering butchers to ensure continuity of supply by working closely with farmers, abattoirs and meat wholesalers.

Tony Goodger – BPEX Marketing


Fish annual RPI continued its wavy journey throughout the 12 months to March 2014, ending at 7%, just 0.1% below April 2013.

Following years of negotiation, an agreement has finally been reached with EU, Norway and Faroe Islands of the fishing of mackerel: the UK’s most valuable fish stock. The agreement means each party will fish mackerel sustainably and split the available quota equitably – resulting in what is estimated to be worth an additional £100 million to the UK economy in 2014.

In addition, the UK has benefited from an agreement between the EU and Norway on North Sea fishing quotas for 2014 which includes a 5% increase in quota for North Sea cod plus a further 2,600 tonnes of haddock and 750 tonnes of whiting.

All in all, some good news for UK fishermen with more fish to catch.


So, short term looking rosy but alas, if we keep eating the delicious fish we enjoy leading scientists predict we’ll have depleted the oceans by 2050! (Washington Post) Eat less and enjoy more!


Cereals annual RPI shifted little in the last quarter – moving only from 3.5% in December 2013 to 3.2% in March.

The most significant change from the latest USDA (US department of agriculture) figures (09 May) show an increase in maize production of 5Mt (annual figure to 979Mt). In addition, lower wheat crop production during winter has driven its first estimate for 2014/15 down 8% (from 2013/14) to 53.4Mt. The US drought may still have an impact on this figure and despite further erosion of US wheat stocks, global wheat stocks are expected to increase around 0.5% to 197.42 Mt.

According to DEFRA, flour production during March 2014 was up on February levels although this may be due to the impact of Easter and not sustainable longer term. This against a backdrop of a further decline in overall feed production, despite demand for dairy cow feed staying high.


Since the cereal movement report for January to March there was a rise in the wheat price against a backdrop of tension in Ukraine and some concerns about dryness in the Mid West of USA. That has recently been eroded in the face of more moisture in the mid-west and the fact that, despite the Ukraine political situation, exports would appear to have been little affected. Old crop is now significantly declined in price and that has knocked on to the new crop with a currently benign global weather situation looking to produce a world record production.

Will Jackson – Shoreswood Farm

Other markets

Potatoes … whilst potato prices have rallied (09 Apr 2014) prices are still far lower than the same point last year, with the free-buy average down £106/t and the weekly average down £229/t (Farmers Weekly). The very wet conditions during January and February significantly hampered planting and continued into the slightly drier March. Until sufficient planting data become available no firm estimates for what 2014 holds can be made.

Eggs … chairman of the Dutch Association of Poultry Farmers, Eric Hubers, has publicly challenged whether or not keeping free range layers is sustainable in the long term because of the risks of bird flu. An interesting conflict between the desire for humane farming and the threat of disease – watch this space.

Chicken … analysis by British Poultry Council (BPC) show that poultry prices have risen just 46.6% from 1987, at around 1.8% a year on average. This represents the slowest rate of 29 different food categories, in particular, beef, pork and fish which have all doubled in price for the same period. According to Andrew Large, BPC’s Chief Executive, this slow rate ” … is due to improved industry efficiencies … nothing to do with supermarket price wars … ” and ” … remains the best value meat for families in the UK”.

Lamb … According to a recent Which survey within London and Birmingham, of the 60 lamb curries tested, 24 had been mixed with other meats such as beef and chicken and some have no lamb at all! Unsurprisingly, the Food Standards Agency pledged to launch an investigation.

Fuel and Energy … the Carbon Trust reports that electricity costs have doubled for businesses over the last decade and argue that sustainability is the way forward … not purely for any environmental standpoint but for business survival. ‘Going green’ can have tangible cost benefits, once you get past the jargon and hype, and introducing initiatives such as LED lighting, smart monitoring and solar gain (to name but a few) can deliver real business benefit. (see BBC’s Technology of Business for more information)

Green grocery … the start to the year has been relatively normal and not as late as 2013. The wetter and slightly milder winter will have some impact on the early season salad supply, whether as a result of delayed planting or increased pest pressure. Assuming the UK summer smiles upon us the harvest time for the majority of UK vegetables should be on schedule this year. So, progress has been steady and so far so good – definitely better than last year!

In other news …

Good news for all vegetarians who are habitually disheartened at the first bite of their appetisingly looking burger, whether in the garden at summer barbecues or at the latest restaurant. A group of students from Lund University have developed what they believe to be the ‘perfect’ veggie burger. Without egg or dairy products its also fine for vegans too – thumbs up all round.

So often dry, bland and full of additives, the veggie burger has long been a disappointment for vegetarians and meat eaters alike but the students have worked hard to recreate the ‘crunchiness and texture’ of the traditional burger. This through incorporating cauliflower (crunch) and not mashing all the vegetables and keeping some longer (texture). Potato starch was used to bind the ingredients together and many different spices were experimented with before coming up with the ‘panel chosen’, best option.

Let’s wait and see of they’re able to make it a viable commercial product!


British beef and dairy prices are forecast to drop in price in the multiples and to farmers, nudged by cheaper imported beef and the greater availability of milk. Cereal prices have also recently declined in price providing a slow down overall in agricultural produce. It remains to be seen whether the softening of these commodities will be reflected in the foodservice supply chain.

Further incidents of mislabelling or “passing off” of one food type for another appears to be more widely reported. Passing off Southern Irish beef for British beef in supermarkets is causing a stir within beef production. Discounted imported Southern Irish beef of indeterminate origin is rewarded at the same premium price when sold with a Union Jack label, along side genuine British Beef, undermining the market place for home reared steers. The breach of trust, in financial circles known as “commingling”, has now reached our supermarket shelves where this word is being applied to mixing these beef joints from different countries.

Whilst the food manufacturers take time and use resources to reformulate their products to meet the new allergens regulations and food labelling (due by 13th December 2014), commodity prices are unlikely to soften to the same extent as the primary source.

For all transparent and traceable product sourcing, look no further than PIP.