With food price inflation still on the rise, and persisting for longer in the UK than in Europe, margins will continue to be squeezed over the coming months.
In this episode, John Bates speaks to some of AHDB’s market specialists and analysts to find out what impact this will have on the beef, lamb, pork and dairy sectors, as they discuss the latest Agri market outlook for livestock.
Guests
Sarah Baker, Senior Strategic Insight Manager
Kim Heath, Senior Retail Insight Manager
Patty Clayton, Lead Analyst (Dairy)
Hannah Clarke, Senior Analyst (Red Meat)
Agri market outlook
AHDB’s latest Agri market outlook looks in detail at the issues and shifting consumer behaviours. It’s produced every six months and examines the factors that will affect farm businesses, helping levy payers plan and budget for what may lay ahead.
Key findings for the livestock sectors:
Beef - Beef production is expected to be up for 2022, bolstered by higher than anticipated cow throughput
- Overall beef consumption is forecast to drop by a moderate 4% in 2022, as the recovery in foodservice demand slows and retail sales start to suffer as consumers switch to cheaper proteins
- Beef imports are forecast to grow as foodservice demand remains in growth
- Exports of beef are still forecast to increase, helped by higher domestic production and the tight supply situation facing the continent
Lamb
- The 2022 lamb crop is forecast higher following growth in the breeding stock.
- Total sheep meat production is expected to rebound from last year’s low levels, returning to 2020 levels.
- A return to more normal trading patterns after two years of disruption led to an increase in the number of available lambs to kill, as we shift away from a pre-Brexit kill pattern
- Demand is expected to remain extremely sluggish in the retail and foodservice sector on the back of changing preferences and rising prices
Pork
- A contraction in the breeding herd is expected, leading to a 6% fall in UK pig meat production, strongly weighted towards the second half of 2022
- UK demand is expected to weaken minimally as the year progresses, as pre-pandemic trends re-emerge along with wider increases in the cost-of-living
- Export markets remain challenging with Chinese demand slowing. Although exports had been increasing, higher GB pig prices and declining production may constrain future volume growth
- Imports are expected to grow in the second half of year as declines in demand are outweighed by declines in production
Dairy
- GB milk production is forecast to finish the 2022/23 season between 1% and 3.8% lower year on year, depending on the severity of cash flow pressures
- Input price volatility, uncertainties around milk prices and labour shortages will discourage most farms from pursuing yield growth
- Milk prices are high but are only just keeping pace with rising production cost
- China’s oversupply may limit import demand for the remainder of the year, affecting global product pricing
- Low economic growth and food price inflation will weaken demand, potentially limiting further milk price increases
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