28 August 1998

Calf prices fall as cull scheme ends

CALF prices are set to plummet when the slaughter scheme disappears at the end of November.

Values could weaken before then, too, as rearers postpone purchases in the hope of cheaper deals and the number of calves on offer rises seasonally.

"Its all falling a bit flat," says auctioneer John Pullin at Gloucester. While the best male animals are still selling well, second and third-quality sorts are harder to shift. "And heifers are a real problem."

The disappearance of the scheme will leave the top Friesian bulls worth between £30 and £50, says Mr Pullin. "The worst could struggle to get a bid."

With harvest under way, demand was quieter last week. The best Continentals at Gloucester were £160-170, with medium sorts £120-150 and the smaller ones from £70-110. Heifers were from about £10-90.

At Salisbury, Wilts, auctioneer John Bundy has seen buyers hold off, waiting for the scheme to disappear. "A lot fewer people are coming to market to buy heifers at present. They think they will be able to buy bulls for the same price as they bought heifers for last year – about £25-45 for the better shaped black-and-whites."

After November, though, more farmers producing Holstein-bred bulls may rear them and claim subsidy – which could lead to a subsidy scaleback. "So everyone will suffer."

What we really need now, adds Mr Bundy, is the export ban to be lifted. "But I cant see that happening yet."

Auctioneer Mark Northcott, at Yeovil, says the slaughter scheme should continue – albeit at lower rates, with a base price of £20-30 for both bulls and heifers.

Meanwhile, the best calves are still occasionally topping the £200 mark, says Mr Northcott. "Ive heard of heifers making £1 or £2."

John Waine of Mid West Calves reckons values wont fall as much as some people suggest in December. Hes anticipating a "soft landing", as dairy producers, anticipating low prices, will retain stock for rearing limiting the number on the market. There could be more confidence in the beef trade by then, too.

Rearers are not putting-off purchases in the hope of lower prices, he says. "They like to get them at this time so they are settled down for the winter and stronger at turnout."

Keith Rose, an auctioneer at Northampton, also thinks Continental calf prices will hold up as demand continues. "Rearers take pride in the type of stock they rear."

What will take an "awful knock", however, are the Friesian bulls, which could sink to around £25, suggests Mr Rose. And the very poorest calves could be just a few pounds. "Or there could be no bids at all.

"It will be a shock to the system for the dairy producers, who will see the value of their by-product cut from more than £70 to about £25."

Above: Farmers are holding off buying calves, expecting price falls after the scheme stops. Right:Bull calves are still selling well – but heifers are harder to shift.