12 April 1996

Higher market throughput hits cattle prices

By Tim Relf

WITH sales of finished cattle increasing again this week prices have fallen.

On Tuesday, nearly 3000 passed through MLC sample markets in England and Wales, compared with 807 the week before. And average prices tumbled nearly 8p/kg to 98.64p/kg.

The increase in throughputs partly resulted from producers deciding to sell cattle approaching 30 months old, says auctioneer Richard Grainger at Hereford, where prices are still nearly 25% down on levels before the BSE scare.

Farmers with animals over this age are facing even bigger problems, he says. "Every week that goes by is costing them more money to keep the stock while at the same time it is decreasing in value."

Like many other auctioneers he is calling for immediate compensation arrangements for such farmers.

Meanwhile, recent supermarket discounts may have stimulated beef demand but analysts question whether the momentum can be maintained.

At ASDA, the combination of a one-third price cut and promotional activity helped ensure British beef sales in the run-up to Easter were about 50% above the levels before the BSE scare.

"Now prices are back to normal levels and sales continue to be encouraging," said a spokesman. Sirloin steak, however, continues to be on promotion at about £7.25/kg, which is about £4 less than usual.

Confidence is coming back, agrees John Dawkins of abattoir group Dawkins. "But the discounts resulted from supermarkets trying to sell stocks they already had, no one knows what the level of prices should now be."

Shortage of prime

Long term a shortage of prime cattle may make them very expensive, says Mr Dawkins. But lower consumption and the backlog in the pipeline will keep prices depressed in the short term, he suggests. Dawkins abattoir at Congerstone is running at about 40% of its usual capacity.

Elsewhere, the abattoirs picture remains mixed. A spokesman for ADP said this week the companys beef plant at Ellesmere, Shropshire, was running at two-thirds capacity, while at York, the figure was about 40%.

ADPs Shrewsbury site, however, which had traditionally relied heavily on export products, was not working. &#42