29 November 1996

Rising market may leave beef area no worse off in 97

By Sue Rider

BEEF will be no worse off next year than before the March crisis – provided finished prices stay above 95p-100p/kg liveweight.

That was the heartening message of ADAS head of sheep and beef development Neil Pickard, speaking to a packed audience at FWs farmer forum Beef – Managing Our Way Out of Crisis.

"For well-managed beef enterprises there will be a future and the coming 12 months will not be as gloomy as the last 12," he said.

Beef finishers purchasing suckled calves now could expect an extra margin of £15/head compared with those achieved prior to March 1996, provided prices held at 95-100p/kg next year. He based his forcast on a reduced income of £126/head, reduced store price of 35p/kg (£112/head), cheaper cereals by £15/head, and interest charges which were £6/head lower.

The barley beef bull finisher could expect to be £15/head better off than before the March BSE crisis, he predicted. The calculation assumed a reduced income of £125/head, a calf price £80 lower, cereals cheaper by £30, a beef special premium payment up £20, and a £10 lower interest charges.

He said it was the specialist beef producer who had been worst hit – any extra aid should be targeted at this sector. "These producers are facing reduced margins of £50-75/head compared with the return they would have expected prior to the crisis," he said.

That reflected a lower beef price of 23p/kg, giving a reduced income of £126/head, an extra £67/head from the beef marketing payment scheme and an extra BSPS payment of £19.70/head.

Of the suckled calf producers, those in the lowlands were the worst hit – facing reduced margins of £36 a head while those in the hills could have earnt an extra £14 a head since March, said Mr Pickard.

He based his figures on a lower sale price of £122/head, extra SCP payment of £33/head, extra BSPS payments of £27/hd, extra HLCA payments of £50/head and a reduction in cull value of £30/head.

Better times in prospect for the beef sector – Neil Pickard, ADAS head of sheep and beef development.