Hybu Cig Cymru – Meat Promotion Wales (HCC) has published its monthly Market Bulletin for December, which looks back at the key trends of supply and demand in a highly unusual year dominated by COVID and Brexit.

In the case of sheep and beef cattle, market prices 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 HCC’s 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, 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 feared, 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.

These patterns are reflected in unusual throughput statistics. UK cattle slaughterings were higher than usual in March through to August, but lower at the beginning and ends of the year due to tighter supplies. Sheepmeat throughput reached a high peak in July; figures have have consistently shown lower than usual slaughterings 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 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 next year 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 this year, in making up for the huge disruptions in the hospitality and catering industry,” said John.

He added, “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.”

“Towards the end of the year we’ve seen a tightening of domestic supply and slight increase in imports into Britain,” he explained, “but the outlook for the next few months could hardly be less clear. Further lockdowns, trade disruption at ports, and the possible imposition of tariffs on trade between the UK and Europe in January are all factors which is adding to the uncertainty at present.”

HCC’s full Market Bulletin for December, including the latest throughput and production statistics, can be viewed here: https://meatpromotion.wales/en/news-industry-info/market-bulletin