23 May 1997

140p/kg is too pricey for stores

By Tim Relf

FARMERS are increasingly objecting to paying high store cattle prices.

Recent steer averages about the 110p/kg mark, for example, have introduced more caution into the trade.

But the best remain over 140p/kg, at a time when run-of-the-mill finished steers are worth little more than 90p/kg.

Auctioneer Geoffrey Dolling at Taunton, Somerset, saw demand weaken last Saturday. "With a few faces missing ringside and a selective interest, prices were back about £50 a head on the week."

But before that, values held "remarkably well". So much so, in fact, that people were choosing to sell finished beasts as stores, in which case they could make a 5p/kg premium or more, says Mr Dolling.

"You would not think there were such problems in the finished ring. People still seem to be assuming that beef prices will go up. But what will make them?"

Auctioneer Tom Lofts at Guildford, Surrey, says recent rains and grass growth have renewed interest in stores. But he agrees the two sets of prices "do not always stack up at the moment".

Short supply in future

Buyers are taking a position, bearing in mind the subsidies available and the possibility that cattle may be in short supply in future.

One concern now, says Mr Lofts, is that by the time a bullock reaches 23 months old, and is eligible for the second subsidy, it could be too heavy.

"If it is over 650kg, it is beyond the butcher and ineligible for intervention and will have to be sold on to the flat UK market.

"Heifers, without the prospect of subsidy, remain hard work to sell unless they are exceptional and can be taken out for breeding."

At Hereford, meanwhile, auctioneer Michael Evans has seen some heifers below 90p/kg.

But someone paying 105p/kg for a blue-carded store steer should still be able to make money, even with the finished price at 90pto 95p/kg, reckons Mr Evans."At this time of year, theyshould be able to grow that,and get their money back."

One farmer who has said enough is enough is Ewan Brewis at Kelso in the Scottish Borders. They have been too expensive since the autumn, when he last bought them, for about 100p/kg.

Seeking good Aberdeen-Angus cattle, the cost would now be about 130p-140p/kg, says Mr Brewis. "Not knowing where the fat market is going, that is too much of a gamble.

"We have taken less rented grass and maybe will get stores in the summer. I would like to get them on the farm for about 110p/kg."

Meanwhile, Mr Brewis says he has "seen the penny drop with other farmers, too".