Calf market has varying fortunes
By Robert Davies
DEMAND for rearing calves is weak – but the slaughter scheme continues to put a floor in the market for bull calves.
Of the 1.2m calves processed to date, 98,000 have been beef crosses. Many of these would have been reared when prime cattle were worth more than 100p/kg lw – but with prices around 85p/kg, buyers are not enthusiastic.
Lack of orders from rearers, direct sales to abattoirs under the scheme and tiny margins on animals bought for fattening have slashed the number of dealers at markets.
One, Nigel Crowe, managing director of Cwmnant Calves, Tregaron, claims that half his competitors have quit. "Black-and-white calves worth £80/head at slaughter are making £73-£77 at market. It is obvious that the margins of dealers and abattoirs are very tight," says Mr Crowe. And there is no sign of returning confidence in any sector of the beef industry, he adds.
"A recent shortage of good quality calves and some demand from suckler herds for replacements for dead calves, or animals to put on cows with a lot of milk, have put an edge on the market. Medium-quality Continental cross bulls have been making £160-£180/head, but the price is starting to come down to a more reasonable level."
Mr Crowe believes that a reduction to £120 or £130/head would give rearers and finishers a better chance to make a fair income from medium-quality animals. And this was the average for beef cross calves last week at markets monitored by the Meat and Livestock Commission – but the inferior animals in the sample depressed the figure. Charolais crosses were back slightly – but still averaged £148, down £20 on the same time a year earlier.
Senior MLC economist Duncan Sinclair says: "Confidence may be low and 9000-plus calves a week are being slaughtered through the scheme, but some people are still buying them to rear. They are not prepared to pay as much as a year ago, but this is a reflection of the depressed finished trade."
Auctioneers, who have seen their commissions fall – with animals going direct to slaughter and those reaching marts of lower value – do not expect any big change in prices until the slaughter scheme ends, the beef price improves or exports restart.