19 December 1997

Calf prices begin their freefall

By Tim Relf

CALF prices are falling, reflecting the doom and gloom besetting the beef industry.

Continental bull calves which, as recently as the autumn, would have topped £200/head, are now struggling to reach £150.

But with BSE again in the headlines after the governments ban on bone-in-beef sales, and with finished steer values about 90p/kg lw, many say the drop was inevitable.

As auctioneer John Bundy at Salisbury says: "Some of those bought for £200-plus in October, that will be finished in spring 1999, are now looking seriously bad investments."

"More sensible now," is how Gloucester auctioneer John Pullin describes the current trade. Hes seen fewer farmer buyers around the auction ring and a downturn in dealer confidence, leaving prices less than half where they were before BSE hit the news in Mar 1996. "But farmers selling them are having to take the medicine," says Mr Pullin.

Further falls could now be seen, with the compensation paid for beef-cross animals under the slaughter scheme soon to be cut to the same level as for black-and-white bull calves.

John Waine of Mid West Calves says, while some farmers may turn their back on beef, demand wont suffer too much, with other sectors of farming also depressed.

Calves are a better bet than stores because they are further away from finishing and there is more likelihood of the cattle market recovering in that time, says Mr Waine.

Plus, any lifting of the export ban is likely to apply only to animals born after a certain date, so new-born stock may be a better investment than stores.

Farmers selling them, meanwhile, continue to lose money by not offering them at their best.

"Theyre probably saying goodbye to £50 a cow by not maximising management and feeding in the first three weeks of life," says Mr Waine. It may be worth feeding them milk. "If you are going to be end up tipping milk away in March, its better to be investing it now in calves."

Peter Hambleton of Warwickshire Quality Calves has also seen the price fall. "But this is traditionally the low-point in the year, anyway, with calves tending to be of a lower quality."

Demand is less in December as farms and estates are empty before stocking up again in the new year. "After all, who wants to be feeding calves over Christmas," says Mr Hambleton.n

Calf prices are now falling in line with lower beef values.