February 15, 2023

387: Agri Market Outlook - Livestock

21 minutes

2022 saw some historic highs for livestock, dairy and cereals. However, as we enter a new year, the position of the world has shifted. Concerns over demand as the global economy battles inflation has left us with supply levels which look ample.

In this episode, John Bates speaks to some of AHDB’s market 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.

Timestamps

02:06 - Beef

05:24 - Lamb

09:44 - Pork

12:28 - Dairy

Guests

Hannah Clarke, Senior Analyst (Red Meat)

Freya Shuttleworth, Analyst (Livestock & Dairy)

Patty Clayton, Lead Analyst (Dairy)

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

Production to grow slightly in 2023 due to higher cattle availability, by an estimated 0.6%

Consumption forecast to ease by 2% as cost-of-living pressures consumers

Imports expected to fall by 2%, driven by easing domestic demand

Exports could grow slightly by 3%, reflective of the domestic market balance

Lamb

An increase in production is forecast for 2023, in the region of +8-9% year-on-year, driven by higher carry-over and a broadly stable lamb crop

Consumption is expected to weaken, linked to recessionary pressures and tighter consumer budgets

Imports are forecast to ease by around 5% year-on-year, driven by weaker domestic demand

Exports are forecast to grow in line with the projected domestic market balance, potentially by over 15%

Pork

Pig meat production is forecast to decline by up to 15% year on year in 2023, driven by a reduction in clean pig kill in the first half of the year, following a significant drop in the breeding herd

A gradual recovery in the breeding herd is expected, with numbers predicted to increase by 7,000 head between June 2022 and June 2023

Imports are expected to grow to match the gap left by reduced domestic supplies, meanwhile exports are projected to decline as available domestic supplies tighten.

Domestic demand continues to ease, driven by the cost-of-living crisis reducing retail sales and eating-out demand

Dairy

GB milk production is forecast to record marginal growth in 2023 in the region of 0.3%. However, there is some risk of a contraction in production if margins deteriorate

Despite some recent signs of lower inflation in agricultural input costs, replacement costs through 2023 will remain high, putting pressure on cash flows

Global dairy demand is likely to remain challenged by low economic growth, although there is potential for improved import demand from China later in the year

Domestic demand is also expected to be impacted by a squeeze on consumer incomes, with all products seeing lower sales

Farmgate prices are expected to decline in the first half of 2023, with some potential for this to abate in the second half if inflation subsides and demand recovers

Useful links

Read the latest Agri market outlook

Trade and policy: food, farming and agriculture

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This episode was produced and edited by Kate Herrick, Marcomms Executive (Dairy).

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