23 October 1998

Christmas pulls prices upwards

FINISHED cattle prices are tipped to rise in the run-up to Christmas.

About time, say farmers, with average market values nationwide having spent much of October well below 80p/kg lw.

"The quality end is starting to move forward," says auctioneer Michael Parry at Gaerwen, Anglesey, where £1/kg is still reached for the best sorts. Attracting the strongest demand are the R3L-grading beasts weighing under 650kg lw or 380kg dw.

Christmas demand will also be felt before long, says Mr Parry. "Prices are more likely to go forwards rather than backwards." And supplies will also tighten, with recently-housed stock not yet ready for marketing.

Peter Kingwill, auctioneer at Chippenham, Wilts, suggests the Christmas trade and the recent weakening sterling will edge prices up. "Imports are comparatively dearer – and this is working for, rather than against, us."

Whats needed, says Mr Kingwill, is a speedy lifting of the beef export ban. "Im doubtful if this will happen before Christmas, though."

Meanwhile the gap between the best and the worst stock is widening, with the poorer end reflecting the inclement weather. "Cattle are not enjoying the rain too much."

And some animals – especially those not given extra feed – are still offered under-finished, making finding a buyer harder. "Nobodys too interested in them," says Mr Kingwill.

Any improvement in prices will be slow in coming, says Mendip Hills farmer Brian Clothier. "The £ will not drop out of bed – but any falls in its value will hopefully suppress imports and give our beef a chance."

Every penny helps, though. A 5p/kg upturn in liveweight prime prices will add £25/head to a steer. And that could make all the difference between profit and loss. "But people should not be doing their sums on the basis that prices will increase."

Even at current levels, however, there is scope for a profit, reckons Mr Clothier. Feed costs are cheap, but the real key to profit is buying the store cheap in the first place. As Mr Clothier says: "Bought right is half sold."

A good-framed heifer snapped-up for, say, less than £200 would cost about £60 to feed and could be sold for between £350 and £400 leaving room for margin, says Mr Clothier. "Mind you, it would have to be some kind of heifer to come to £400."

Oxon farmer Robert Florey agrees the purchase deal is the key. Which way finished values will go is, after all, "anyones guess".

"You cant affect the end price that much – but you can the buying price – so Im very conscious of what I pay."

Mr Floreys been targeting Aberdeen Angus stores which, he says, command a premium when sold finished to Waitrose.

Cheaper food will help the job. "Were trying to feed them all on home-produced food – and weve got plenty of silage." &#42

Talk of Christmas may be premature. But after all, its little more than 50 shopping days away and the boost beef buying gets as the festive season approaches could soon push up cattle prices at auction marts.