Rural commodity round-up: March 2018

March has been a positive month for the markets with noticeable price movements seen across all main commodities. However, with the after effects of the Beast from the East and a month of continued rain, this could put pressure on prices in the weeks to come. We take a look at some of the most significant developments below.

Cereals

Average feed wheat prices rose into the £140/t ex-farm bracket for the first time since July last year – ending the month on a high of £144/t. Increased prices were largely driven by a weakening sterling, meaning UK wheat gained competitiveness on the export market.

Looking at supply, initial projections for 2018/2019 global grain stocks indicate a tighter supply. Total grain ending stocks are projected at 560m tonnes – down 8% - according to the initial release from the International Grains Council. Driving this is the estimated decline in global maize stocks, down 43m tonnes to 265m tonnes – despite an increase in production. 

Oilseeds and pulses

Oilseed rape prices fluctuated across March, starting the month at an average price of £292.80/t ex-farm and ending on £284.80/t. The arrival of rain in drought-stricken parts of Argentina provided some recovery for the Argentinian soya bean crop – resulting in a sharp decline in prices. 

Beef

Finished cattle markets remained relatively flat during March as prices struggled to move out of the 360p/kg (finished steers, deadweight R4L) bracket – starting the month at an average price of 367.4p/kg and finishing at 369.6p/kg. 

Sheep

UK lamb prices soared in the run up to Easter with average finished lamb values starting the month at 498.1p/kg and ending at 533.5p/kg (DW R3L) – the highest value seen since June 2011 when prices hit 536.1p/kg. The producers’ share of the retail price also rose in February –by almost seven percentage points compared to January to 56.4%. This was nearly 10 percentage points higher than February 2016. 

Pigs

Pig prices remained stagnant during March, keeping around the 148p/kg (APP DW) mark, as supplies continued to run ahead of last year. Estimated slaughterings for the week ended 18 March totalled 186,300 head – 9% ahead of the same period last year.

Milk

UK farmgate milk prices continued to decline in February to average 29.64p/litre. Many processors have announced further cuts to April and May contract prices, marking the fourth consecutive drop from Muller which has cut its standard milk price to 26.2p/litre as of 1 May 2018.

Poultry

UK poultry meat production increased by 1% (13,600 tonnes) year-on-year in 2017, to 1.8 million tonnes, according to Defra data.

Broilers accounted for around 85% of all poultry meat produced in the UK, totalling 1.6 million tonnes in 2017, up 2% (35,800 tonnes) year-on-year. As a result, the total number of broilers slaughtered rose by 4% (44.3 million birds) during the same period, to 1.03 million birds.