By Vicky Houchin
BEEF producers can look forward to firmer prices if CAP Agenda 2000 reform proposals lead to fewer cattle being marketed.
The new cattle slaughter premium, part of the Agenda 2000 package, could lead to a shortfall as cattle producers withhold stock and take advantage of an extra £18 per head for any animal over eight months of age from 1 January, 2000. That will increase to £36 in 2001 and £54 in 2002.
ABP group procurement manager Bob White believes that prices this autumn should be better than last year although there is uncertainty about the numbers likely to be marketed.
The question is how many cattle will be carried through until next year in order to attract the new slaughter premium, said Mr White.
“Theres talk of a lot of lightweight cattle available for the autumn. But whether theyll be carried forward or not is not known.”
But pressure from cheap imports would prevent any significant improvement in prices, warned Mr White.
Mr White said consumers would be reluctant to pay more for British beef while significant cheaper imports were available.
Robert Forster, National Beef Association chief executive disagreed. Competition between abattoirs was the biggest factor influencing prices, he said.
“They end up paying more than the market justifies and are unlikely to get the extra back.”
Mr Forster agreed that the slaughter premium will affect the availability of cattle in the autumn but subsidies always distort the market, he said.
Some farmers may well be tempted to hold over livestock to receive the slaughter premium, he said. “But the rise in BSP payments next year might influence some farmers to hold off in December and put more into retention in January and February.”
Buckinghamshire beef producer Stephen Whiteford plans to take advantage of both schemes at the start of next year. Having maximised his BSP claims he will use the slaughter premium for the remaining cattle.
Mr Whiteford is not worried by a potential glut of cattle in January. “If theres a shortage in the autumn, prices will firm and then producers will sell then instead.”
Meat and Livestock Commission (MLC) economist Jane Connor predicted that cattle numbers will be down 3% in the last quarter of this year which will probably firm the market.
But the major factor that caused cattle values to plummet last year was the crisis in the Russian economy, not the high numbers of cattle available in the UK, said Ms Connor.
“Slaughter premium or not, I hope we wouldnt see the same situation as last year,” she added.