Beef breeding stock prices all set to rise
By Allan Wright
ALL signs and forecasts point to a firm demand and rising prices for beef breeding stock throughout the year.
Scottish NFU president Jim Walker says there are various reasons for the trend which is already being seen in the auction ring.
"Everything coming out of Ag-enda 2000 reform of the EU common farm policy, right down to disbursement of national envelope money, points to more support for suckler cows. There are several things which, taken together, suggest a rising market for beef stock," he says.
He points to a move towards breeding home-bred replacements. "The influence of the Holstein in the dairy herd means that the quality people want in suckler cows is no longer available from that source," he says.
There is also the Agenda 2000 change which will allow heifers to be eligible for suckler cow premium. "That is bound to increase demand for young heifers this autumn as herds gear up for the change next year," he suggests.
Also, the change from headage to area payments of HLCAs, which used to be paid only on cows, will not compromise the eligibility of heifers for suckler cow premium.
"The next thing is that we are pushing to reduce the effect of the Agenda 2000 reform which would have cut suckler cow quota by 5% from next January. We want a complete surrender of the national reserve and for it to be spread throughout existing quota holders.
"That will reduce the cut to about 2%. But even at that, farmers will want to retain numbers and that will mean a rising demand for quota," says Mr Walker.
He also points to the flat rate value of the OTMS scheme and the new slaughter premium. "It means no extra for big cows. The meat trade is also looking for cattle that finish at lighter weights and it all points to a switch to smaller suckler cows that are easier to keep."
SAC expert Basil Lowman agrees that producers are disenchanted with dairy-bred suckler cow replacements and says more and more are moving to breed their own replacements.
"I know one man in Aberdeenshire who is not only going to breed his own replacements, but sees a growing market for breeding them for other beef farmers. Agenda 2000 reforms seem to favour beef over sheep and so do the environmentalists.
"However, I do think buyers will be selective. Quality will be the name of the game in the finished market and that will be reflected in the choice of suckler stock," says Dr Lowman.
Pat Lawson of United Auctions agrees. "I see a rising market for the quality end of the beef breeding market, but little change further down the line. The strength of sterling which has knocked £24 off the OTMS value of slaughter cows is bound to have a steadying effect," he says.
But Castle Douglas auctioneer Robin Anderson disagrees. He cites an increasing number of dairy herds being sold off in south-west Scotland and replaced with sucklers. "To get numbers, these buyers are having to settle for some stock of lower quality than they would like and prices are rising across the board."
He has conducted two big beef breeding sales in the past fortnight, both of which reflected a rising market.