26 September 1997

Dairy cow price gap widens

DAIRY cow prices should be heading downwards with the dozens of dispersals taking place, the lower milk prices and the drop in cull cow compensation to little more than £300.

"But good commercial heifers are still worth four figures, says Terry Hamlin of Stags. "The gap between the best and the rest has, however, widened."

In the week to Sept 16, the national average market price for first-quality cows was £759, up more than £100 on a year earlier.

Bagshaws Nick Hansen says: "Theres a vast number of dispersals taking place, many of them due to retirement.

"Buyers can afford to be selective. Some people are looking to rejuvenate their herds, selling older animals and replacing them with heifers."

Theres still some demand for the older stock, too. At say, £450 to £500, therell be some people who – looking to fill the milk tank – will buy them and keep them through their existing lactation and possibly one more, reckons Mr Hansen.

Auctioneer Tom Brooksbank agrees the lower milk price and the reduced cull value has left buyers wary. "Small farmers, particularly, are under real pressure."

He has seen little evidence of farmers re-investing cohort money. And upgrading, he says, is the aim of those that are. "Few people are replacing like with like."

But Mr Brooksbank saw a bid of 14,500gns at a pedigree sale on Monday. "So it cant all be bad news in the industry."

There are a lot of cattle on the market, says Mr Brooksbank. Those facing big investments in the parlour or a slurry system see this as a good time to leave the industry.n

Heading upwards or heading downwards? Demand has stayed strong for the best dairy animals – but all the pressures on price now seem downward.