11 January 2002

Beef payments up as value of k rises

By FW reporters

BEEF headage payments will rise this year due to higher k values and more favourable exchange rates.

The payments are converted from ks to sterling using the average exchange rate during December. Meat and Livestock Commission economists calculate that the k was worth 61.9444p over the month, about 0.5p more than last year.

The European Commission has yet to confirm this figure, though it is unlikely to vary significantly. According to MLC calculations, which allow for a 3% modulation rate, steers will attract a payment of £90.13/head, £8.64 more than in 2001. Bulls will qualify for about £16.20/head more than last year.

Suckler cow premiums also benefit, gaining just over £11/head, while slaughter premium rates are up by more than 50% for cattle over seven months old.

However, beef special premium stocking densities have been tightened from 2LU/ha to 1.9LU/ha. This offsets some of the headage gain when converted to an area basis.

For example, steers under two years (each individual is considered to be 0.6LU) will qualify for £284/ha. Although about £13/ha better than last years rate, the payment would have risen to about £300/ha had the old 2LU/ha stocking density remained.

More land may be needed for the beef enterprise, too, says Francis Mordaunt of farm business consultant Andersons. "Any reasonably stocked business is already at its stocking limit. Farmers may have to consider renting more grazing to increase the forage area to comply with the rules."

Stocking density thresholds have also been reduced for the extensification payment scheme, to 1.4-1.8LU/ha, compared with 1.6-2LU/ha in 2001. And super-extensification is now less than 1.4LU/ha.

On the plus side, the 90-head limit on claims has been waived for the second year running and claims for fewer than 30 animals will not be subject to scaleback if the total number of cattle claimed exceeds the UK regional ceiling, something the consultant feels is a possibility this season. &#42