Beef calves dip in wake of rate cuts
By Tim Relf
BEEF calf prices have fallen further, after the cut in slaughter compensation to the same rate as for black-and-whites.
The scheme now pays £80 a head for all male animals under 20 days old, compared with the £121 and £97 available for beef and dairy calves respectively this time last year.
"Prices are a long way back on where they were last summer," says auctioneer Andrew Jennings at Holsworthy, Devon.
With all eyes on the "end-product" price, the poor beef trade has eroded buyers confidence. There isnt the will to pay £250 that there once was – and only a handful are topping the £200-mark, says Mr Jennings.
But the possibility remains, with big numbers going into the slaughter scheme, of a beef shortage in two years time, he says.
"Heifers, which are cheaper to start with, will perhaps pay the best of all. It takes a really good Continental heifer to get near the £80-mark and the poorer ones are worth £15-£20."
According to auctioneer John Bundy, who sells at Salisbury and Shaftesbury, heifers "have got so cheap that they have to be bought."
Continental bulls that were making just over £100 have, since the drop in compensation payments, been changing hands for about £85, he adds.
The top price at Salisbury last week was £190, bid for a Simmental male.
Mid West Calves John Waine says dairy farmers have hung on to crossbred heifers but, with prices likely to rise in the coming weeks, they should consider selling them.
Longer-term, a flood of black-and-white bull calves arriving on the open market could depress their value. "Unless you believe Jack Cunningham (farm minister) is Father Christmas, the end of 1998 might see the end of the slaughter scheme," says Mr Waine.
"As the year unfolds, it may be worth reconsidering your breeding policy. If you dont need heifers, you should perhaps be moving back to beef to protect your calf income."
But Keith Rose at Northampton market expects the processing scheme to stay in place until the beef export market is reopened.
Meanwhile demand is lacklustre. "This is now the time of year when its traditional to see a few more active rearer-buyers. They may be standing around the auction ring – but theyre not doing any bidding," says Mr Rose.
• During 1997, 528,936 dairy and 66,569 beef calves were accounted for by the slaughter scheme.