8 January 1999

Finished cattle market holding

FINISHED cattle prices have held most of their pre-Christmas rises, contrary to predictions of a downturn.

"An excellent start to 1999," says auctioneer Maurice Wall after Mondays sale at Highbridge, Somerset.

Buyers, he says, were "hungry for numbers", taking 10 bullocks over the 100p/kg-mark, with a top of 115p/kg. Steers and heifers averaged 90.8p and 86p/kg respectively.

"If the quality was right, 100p/kg was readily available for the best steers. At that margin, beef farmers can operate."

Supplies are now set to tighten, says Mr Wall, as the effects of the calf slaughter scheme are felt. Farmers have also been wary of finishing stores this winter, partly because traditional, extensive finishing systems have been badly hit by the 30 month age ceiling on cattle entering the human food chain. "Half of my regular suppliers have much reduced numbers after scaling back.

"In May, June and July, there could be an extreme shortage and the traditional lift in prices," adds Mr Wall.

Auctioneer Michael Parry at Gaerwen also speaks of a possible shortage, with beef finishers having "switched off" the enterprise after years of loss-making. While this bodes well for prices, the market is still vulnerable, he stresses.

"We are all looking for price increases – but we are all conscious that if the price rises sharply it could do long-term damage by sucking in imports or switching consumer demand."

And the immediate future could be tricky, says auctioneer John Hughes at Lancaster. "Its the usual story – unless numbers are in short supply, we will see a bit of a dip after the Christmas spend."

Farmers, meanwhile, are cautious about the effect the lifting of the export ban will have in the short term. As Oxon-based Robert Florey says: "I cant see a lot of light yet. It will be a slow process."

&#8226 Mondays steer average at markets in England and Wales was 90.4p/kg lw. &#42

Carrot or stick? Not the carrot, thats for sure, if its a question of whether to keep cattle for profit. Falling prices have left fewer farmers producing beef – and the supply shortage could, say some, give values a boost.