26 July 2002

Demand for quality lifts beef values

By Simon Wragg

BEEF prices are rising as quality finished cattle remain in tight supply.

That looks set to continue, although imports and resumption of the date-based export scheme (DBES) will affect trade later this season.

Although some live auction averages have slipped in the past fortnight with a flush of poorer stock, traders report a buoyant market for prime cattle across all sectors.

Deadweight sellers have seen about a 10p/kg increase in values between June and July this year, says the Meat and Livestock Commission. Early July figures show steers averaging 173p/kg, heifers 170p and bulls 167p. Further increases are expected.

In the live auction, the reappearance of some deadweight buyers suggests cattle supplies are getting tight. Auctioneer Ivor Lowe of St Asaph market, north Wales, says well-fleshed stock are scarce, despite a good spring grazing season. "It would appear that is the case across the country."

Although the onset of hay making and harvest has prompted some finishers to sell stock early, prime entries are achieving over 100p/kg liveweight, he says. "Including the poorer sorts, we can still average 94-95p across the board."

Variation in quality may also explain why buyers from small and medium-sized abattoirs are back at the ringside, suggests Derby markets beef auctioneer, Charles Hollis.

"These men often cant handle cattle outside their spec – here at the auction they are picking exactly what they want.

"Overall, quality is variable, but that can be area related. We draw cattle that are dairy bred and that makes a difference against those who see more suckler-bred stock. Even so, the current trade is no disaster," he adds.

This weeks entry at Ludlow confirmed suspicions for McCartneys auctioneer John Uffold. Although numbers were down due to the Royal Welsh Show and TB restrictions on some holdings, early grass cattle have not achieved the desired level of finish, he says.

"Despite what people say, it has not been a good season for grazed cattle. We are starting to see heifers finished off grass coming in, but there is still plenty to come out of yards."

MLC beef economist Duncan Sinclair says the market should remain firm, but producers must allow for the release of intervention stocks to affect values later this summer, which might peg prices back.

Fortnightly tonnages coming out of store have been relatively small to date, but that could change once the EU Commission resumes after its summer break. "Imports will always be a determining factor," he warns.

But some good may come of changes to the DBES rules. Expected from Aug 1, regulations will allow qualifying abattoirs to process beef for both export and domestic markets in the same plant in future, he adds. "It looks a viable option."

But any resumption of beef exports this autumn will enter a competitive market. "Irish beef production will be at its peak and that will affect trade, but thankfully the k is appreciating against sterling, which should help overcome currency issues for trade." &#42