15 August 1997

Beef returns must improve to keep farms in business

HIGH calf prices caused by the calf processing scheme and low returns for finished cattle are threatening the long-term viability of farming for beef and cereal farmers Robert and David Lovegrove.

The pair, who farm 283ha (700 acres) at Carpenters Farm, St Helens, Ryde, Isle of Wight, said the calf processing scheme had placed an artificial floor in the market leading to a near doubling of prices.

At the same time, prices for their cattle, which have had to be finished more intensively to avoid placing stock in the over 30-month scheme, have slumped by more than £100 in the past year.

The brothers, who buy in 130 mainly continental beef cross calves and run a small home-reared Hereford cross suckler herd, told visiting island MP Peter Brand that unless returns improved a number of producers would be forced out of business.

Robert Lovegrove said last year he was buying in Belgian Blue calves at between £100-£110 and paying £65 for Angus bull calves, but that prices had since risen to £150 for Belgian Blue calves and £120 for Angus calves.

He blamed the calf processing scheme, and added that some farmers were switching from Friesian bull calves to continental bull calves.

Prior to the BSE crisis, the animals were being grazed extensively with little concentrate to finish at 36 months, but the introduction of the OTMS caught the farm out. Virtually all had to be placed in the scheme last year, but despite that prices held close to 1995-96 levels at £619 a steer and £534 a heifer.

Wishing to sell on the market this year, the brothers have tried to finish the animals at 29 months old, using additional concentrate, but have found prices averaging £519 for 300-320 kgs deadweight steers and just £408 for 270-290 kgs deadweight heifers.

"Basically, we are being squeezed at both ends – buying in and finishing," said Mr Lovegrove.

Artificial prices

Duncan Sinclair, Meat and Livestock Commission senior economist, agreed the calf processing scheme was artificially increasing the calf prices when finished cattle prices were weak.

Mr Sinclair said it was likely to reduce the number of prime cattle for human consumption at the end of 1997 and beginning of 1998. And while beef consumption in the UK was rising, it could lead a greater opportunity for other member states to export finished prime cattle to the UK.

&#8226 The UK is continuing to bare the brunt of the EU calf processing scheme, slaughtering 728,997 mainly dairy calves. Only France (192,787), Portugal (34,220) and Ireland (18,345) have taken up the scheme, though other EU nations have entered an early marketing scheme for veal calves.n

Robert (left) and David Lovegrove say their beef business is being squeezed at both ends – buying in and finishing.