26 November 1999

Deadline looms & suckler cow quota prices nosediving

By Simon Wragg

SUCKLER cow quota is being leased at extremely low prices as the market enters its final weeks trading ahead of the Dec 6 deadline.

Some brokers are reporting lease deals being signed as low as £5/unit in some parts of the country as lessors look to meet MAFFs 90% usage rules to keep individual quota holdings alive for next year. Then, with the inclusion of breeding heifers on to claims, many expect trading values to increase markedly.

According to Grant MacPherson of United Auctions Dingwall mart, producers able to invest in the remaining few days of trading can expect to recoup the vast majority of subsidy payment. This is expected to be about £112/unit before extensification and hill livestock compensatory allowance bonuses.

No gamble

"Theres no gamble left in it," says Mr MacPherson. "Offers are being taken readily although the sale trade has dried up almost completely."

Further south Chris Windle of Skipton-based David Hills brokers says trade is hovering under £30/unit after falling from an initial £70 start. "There are still people looking to lease, possibly those who saw the early values and decided not to go. It is definitely a buyers market and a far cry from the strong earlier trade."

That is certainly the case, adds Hereford-based Richard Hyde. "Lessees are in a marvellous position, probably the best for some time. The market is still looking for £30 a unit, but quota holders are looking to get the quota they hold covered….I wouldnt like to say how far theyll go," adds Mr Hyde.

Brokers are surprised at how quiet the market has gone, but suggest producers may have been put off by strong values earlier in the trading period when most talk was of prices firming further. Consequently, MAFF officials say the number of claims entered by the end of September was slightly up on last year.

"Only those producers who have not already submitted this years claim can benefit from the fall in lease values," warns Kate Waller of Penrith Farmers & Kidds.

However, there are still a number of producers nationwide yet to enter subsidy claims, says MAFF. And that undetermined trade is helping firm cow and calf prices.

Tuesdays trade at Penrith saw better cow and bull calf outfits changing hands at over £500. "Farmers are either topping up to fill quota or have decided they can afford to have a few more cows over the winter with prices discounted by the lower quota price," explains auctioneer Michael Bowe.

Likewise at Exeter – values are up £100 on the year with Simmental cow and bull calf outfits worth £420-540, says Peter Farnsworth. "There will be some players right here to the end."