29 March 2002

Farmers slow to part with F&M pay-outs

By Simon Wragg

PRODUCERS have been slow to reinvest £1.08bn worth of compensation paid for stock due to foot-and-mouth, according to auctioneers, which suggests many businesses are still considering their options.

A month ago, DEFRA unveiled its £50,000 ADAS-conducted survey of 1000 affected farms. It suggested that 78% of premises would restock and 65% of premises, classified as dangerous contacts, agreed that restocking was a priority.

But the trade reports that livestock sales have lacked urgency.

With the tax year ending on Apr 5, many affected farms will be nearing financial year ends and unless compensation is invested, some cash could be lost back to the Treasury as taxable income. But producers appear unhurried to act.

"Certainly, the trades not what wed expected," according to David Pritchard of Carlisle-based Harrison & Hetherington. "Although the sheep sector is still facing restrictions on movements and producers intentions are not yet clear, there remains a large number of livestock farms that have yet to restock."

The resumption of pedigree beef sales at Carlisle has at least drawn buyers to the ringside, but the commercial sector still lacks pace in looking for replacement sires, he says.

"Its hard to imagine many have had a chance to swap sires during the past year – the open market should reflect that."

Gwyn Williams, of Frank R Marshall in Chelford, has seen pedigree Texel and Belgian Blue stock through the ring and detects a definite trend. "Buyers are hand-picking animals on quality, not just looking for quantity."

However, the availability of stock remains a concern. Adding to pressure on sheep numbers, the start of the retention period for ewe premium has stifled demand, says Penrith Farmers & Kidds market manager Chris Dodds.

"It could be slow until retention ends on May 15. That said, Cumbria is a traditional sheep county and we expect those who were predominately sheep farmers before F&M to go back in."

In the south-west, Derek Biss, of auctioneer Greenslade Taylor Hunt, reckons the dairy trade has plenty of scope to move more stock. "Its certainly not been the fireworks we expected or would have liked."

Falling milk payments have hit demand with few producers prepared to reinvest unless they are absolutely sure they can make a margin.

"We have seen some dairy farms shelve their initial plans and move into store cattle or sheep as an alternative.

"But demand in the beef ring has been pushing values hard and some of these margins are also looking questionable.

"I suspect some units will run dairy youngstock this spring to keep on top of grass in the hope they will grow into money." &#42

&#8226 Most breeders say they will reinvest compensation £s.

&#8226 Trend for quality, not quantity.

&#8226 Some still waiting.

&#8226 Falling milk price has been a deterrent.