8 November 1996

Confidence at suckled calf sales

By Tim Relf

FARMERS have been confident that beef prices will rise, judging by the prices paid at this autumns suckled calf sales.

A sale at Hexham, Northumberland, last Friday, for example, saw bullocks and heifers average £470 and £355, respectively.

Values were down about £50 on last year. That saving in the cost of the calf means producers can take up to about 10p/kg less for the finished stock than in previous years without eroding returns, according to auctioneer Bruce Walton.

But that might still necessitate getting 110p/kg when these animals come on to the finished market in autumn 1997.

"Not unrealistic," thinks Mr Walton. But crucial now to underpinning demand is a resurgence in manufacturing interest and a reinstatement of export demand, he says.

"The confidence around suckled calf rings is certainly not based on the current prime beef price," agrees auctioneer Scott Donaldson at Wooler, Northumberland.

He saw autumn-born Charolais steers at Woolers recent sale average over £500.

"Were the finished trade to stay around 100p/kg, there wont be much return, especially not for the better-quality stock which costs more as calves."

Those that are to be finished next spring will be on a high concentrate mix and, being bought on blue CIDs, will not qualify for any subsidy payment, he points out.

Auctioneer Ian Smethurst at Banbury, Oxon, saw steers typically make between 145p and 170p/kg, with the best topping the 200p/kg-mark at a recent offering.

Even so, they show a potential for profit, with the over 30-month-scheme, the calf slaughter scheme and intervention combining to tighten beef supplies and help prices, he says.

"Cheaper input costs, too, will help margins. Potatoes, carrots and straw are cheaper this year than last. And there is more silage around," says Mr Smethurst.

But auctioneer Glyn Owens at Knighton says suckled calf buyers are very mindful of the current fat trade when bidding, with any rise in beef prices likely to be a "long haul".

Buyers are certainly not banking on beef prices to rise back to the levels seen in previous years, he says.