AHDB UK Market Survey - 8 June 2012 - Market Reports

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11 June 2012

AHDB UK Market Survey - 8 June 2012

Pork roasting joints recorded a seven per cent decline in purchases; this was largely influenced by the poorer performance of leg roasting joints.

Increased promotions boost Easter lamb purchases

Easter is a key occasion for purchases of meat roasting joints, second only behind Christmas. However, last year the performance of roasting joints was somewhat muted as the particularly warm weather discouraged purchases across all species. In contrast, this year the weather over the Easter period was cooler providing a positive impact on purchases of some roasting joints, most evident for purchases of lamb legs.

The above chart highlights the year-on-year Easter performance for the main roasting joints. Lamb leg roasting joints were evidently the best performing having recorded a 34 per cent increase in volume purchases. This comes off the back of a poorer performance in 2011 when there were unseasonably low levels of promotional activity on lamb. However, the heavy promotional activity was back in evidence this year, with 42 per cent of lamb sold on promotion.

These promotions were effective in driving additional purchases of lamb leg roasting joints over the two-week period preceding Easter, compared with last year. Increased promotional activity has also boosted lamb sales in the post-Easter period. With over 57 per cent of leg roasting joints sold on promotion, during week ended 6 May, sales were up considerably both week on week and year on year.

Volume purchases of first quality beef roasting joints were down 13 per cent on the year, largely influenced by a decline in promotional activity. During Easter, 30 per cent of first quality beef roasting joints were sold on promotion; this was down from 41 per cent during Easter last year. Volume purchases of whole chicken remained fairly static over Easter, but there has been a stronger performance during 2012 as a whole with volume purchases up 12 per cent in the latest 12 week data.

Pork roasting joints recorded a seven per cent decline in purchases; this was largely influenced by the poorer performance of leg roasting joints. The strongest performance for pork came from frying/grilling chops where purchases increased 18 per cent. In the two-week period over Easter, 31 per cent of frying/grilling chops were sold on promotion compared to 21 per cent last Easter. Leg roasting joints had lower levels of promotional activity compared with last year and volume purchases were 19 per cent down. The higher promotional activity on chops and lower average price in comparison to beef and lamb has helped drive growth in purchases.

*Due to changes in the timing of Easter we could not directly compare standard periods and therefore have compared the two weeks leading up to Easter in both years.

Pig market trends

Prices

Due to the double bank holiday to celebrate the Queen’s Diamond Jubilee, no Deadweight Average Pig Price (DAPP) was published this week.

Elsewhere in Europe, prices have begun to increase again as improved weather conditions have led to increased consumer demand and supplies of pigs remain tight in many EU Member States. The EU average reference price has risen from €161.37 per 100kg in week ended 13 May to reach €165.18 for week ended 3 June, an increase of over two per cent. This is the highest level recorded since October 2008 and is equivalent to 132.32p per kg, around 13 pence lower than the latest UK reference price.

As is often the case, the EU average price followed a similar trend to the German one, which increased by three per cent from mid-March to reach €171.36 per 100kg in week ended 3 June. Prices in neighbouring countries such as the Netherlands, Belgium and Poland showed a similar rise. Other than the UK, the highest price among major producing Member States was in Spain. Its average price reached €175.21 per 100kg in week ended 3 June, its highest level in nearly six years. This comes despite a five per cent increase in Spanish pig meat production in the first quarter, as steady demand from domestic consumers has been backed by strong export performance; Spanish pork exports were up by 30 per cent year on year in the first quarter.

Consumption

In the 12 weeks to 13 May 2012, household purchases of fresh and frozen pork fell three per cent. There were declines for the majority of cuts with leg and shoulder roasting joints recording the largest declines; down 15 and 17 per cent respectively. This drop has been driven by a reduction in promotional activity compared with last year. As a result of this reduction the average price paid by consumers increased by eight per cent compared with last year. This increase was the sole driver behind a five per cent increase in expenditure on fresh and frozen pork, at £219 million.

Pork belly and loin roasting were the only two cuts to record purchase growth year-on-year with increases of six per cent and 41 per cent respectively. In other products bacon purchases were up nearly four per cent and chilled ready meals increased by five per cent. In contrast purchases of pork sausages fell by five per cent.

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