MARKET STRATEGY VITAL TO MAKE MOST OF BETTER BEEF PRICE:By Ian Ashbridge
BEEF FARMERS should consider whether to market stock by deadweight sale or through the auction ring to make the most of stronger beef prices, say traders.
With no subsidy safety net to fall back on, marketing animals carefully is crucial to maximise returns.
Robert Forster, chief executive of the National Beef Association, said: “Under the new regime, market income is everything. Farmers must sell their stock as cleverly as they can.”
Over- or under-finished heifers could be better off in marts, as they offered cattle to a wider selection of buyers, he said. “And penalties will vary with different abattoirs, so stock needs to be placed carefully. For heifers under 280kg or heavier beasts over 380kg, the auction ring could be the right option.”
Poor pre-Christmas values were not helped by producers rushing cattle on to the market in a bid to claim the last available slaughter premiums. But a widely predicted shortage in early January sent the average R4L steer price to 189.1p/kg, up nearly 9p/kg on the week.
Some in the trade are more sanguine and predict the sudden rise in demand could ease fairly quickly, as supplies of finished cattle increase. A spokesman for Anglo Beef Processors said the rush to market cattle before bovine support schemes ended had exacerbated the seasonal fall in supply. “And there is usually some decline in consumer demand for beef after Christmas excesses.”
Duncan Sinclair, beef economist at the Meat and Livestock Commission, said the improved prices had been mainly supply driven. “Values have got off to a reasonable start this year, but the market will probably begin to settle down now.
“But we have to be conscious of the power of retail spending. There is a limit to how high beef prices can go before they start to affect consumption.”
And it was a reduction in available forequarter supplies that had helped to drive beef values, said Mr Sinclair, rather than hindquarter or prime cuts. “The market is probably beginning to redress itself now.”
Numbers forward have rapidly risen in auction marts, say traders. Alastair Sneddon, auctioneer at Bakewell market in Derbyshire said the mart’s first sale on Jan 2 had seen a small entry, but had more than doubled the following week and was up again on Monday (Jan 17).
“The real difference to the trade now is that we have seen many more buyers at the ringside. Post-slaughter premium, the market has freed up and people can now pick animals out of the fat ring to keep as stores, or even potential breeding cattle.
“There are easily half a dozen fresh faces around the ringside.”