Market now to keep out
By Simon Wragg
FINISHED cattle must be marketed when ready and not held back in anticipation of better prices, otherwise imports will be sucked in in their place, warn abattoirs.
Already figures have shown a slump in throughput in recent weeks, partly due to the interruption of the Bank Holiday to market days. But the trend is expected to continue.
According to the trade, numbers could be back on last year by 20% from October onwards .
This situation is adding to current calls for finished animals to be marketed, particularly as the amount of beef eaten is increasing.
According to MLCs senior economic analyst Duncan Sinclair, the most recent consumer census taken in April suggests a 3% rise in demand.
With this in mind, the National Beef Association expected tighter supplies to have pushed prices forward. Instead, the long-term 8-12% fall in finished stock has "failed to express itself in stronger prices and you have to ask why?," says the NBAs Robert Forster.
The concern is that prices are being held down currently by pressure from retailers.
Although not obvious, this could be applied by buyers leaving the fat ring and taking forward or finished cattle from store sales, despite stronger prices. This is particularly likely at northern markets attracting stronger types.
According to Hexham markets Scott Donaldson, although stores are more costly and would have to be held on-farm to re-coup levies worth £12 a beast, they can be turned around quickly. This could explain why demand for finished cattle is behind expectations.
These concerns are expressed by Rugby-based finisher John Bell. He agrees with the NBA that prices have not moved in line with lower numbers forwarded. "If I was to look for a comfortable return now it would be 185-188p deadweight, not the 177p/kg weve got."
As managing director of the 25 member-strong Meatgold producer group, finishing 5000 cattle annually, he says producers are concerned that corners may be cut in the supply chain. This could affect quality for the sake of accommodating a shortfall.
For example, if a retailer or supplier is tempted to cut the maturation time by a day – gaining a days supply effectively – the eating quality of beef could fall and affect consumption. That would exacerbate values for the producer.
Although price control remains taboo, abattoirs admit that supply and demand is already running tight, due in part to retailers supply protocols.
Midland Meat Packers Richard Field says the supply situation is becoming ever-more difficult and will come to a head later this year. With almost no room for buffer stocks for fresh chilled beef, the sector is facing "a balancing act all the way".
The main concern is with increased beef premium later this year and the introduction of a slaughter premium after the new year producers may be tempted to hold on to stock. "I think industry has to be realistic; rather than expect fantastic prices, if a shortfall gap opens imports will be sucked in," he warns.
Current beef prices are running 10p/kg a head of this time last year at almost 95p/kg. "These could improve over the next few weeks if demand continues with lower numbers," says Mr Sinclair. This is a realistic move and a real price push is expected later in the year. *
Strong sterling hits Irish punt
FARM dispersal prices for second-hand machinery are running ahead of collective sales as overseas buyers back off with sterling gaining strength.
At Mondays auction at the Cambridge saleground auctioneer William Pepper says Irish buyers were absent following the pounds rally against the punt. "It was a good day for sterling buyers."
That gives a small advantage to those remaining, particularly end users, he suggests. "At on-farm sales prices can generally go that bit further as you are looking at the end-user buying, rather than a dealer looking to pass it on and make a margin." As ever, demand was clearly for clean kit which has been maintained well and kept under cover. But fewer entries were forwarded by dealerships with good second-hand tackle being easier to shift from yards.
As seasonal demand dictates, grass equipment sold well. A PZ drum mower with only one season under its belt traded at a discount of about £600 on its retail price to fetch £1200. A three-year-old Vicon CM127 mower in good condition took bidding to £1600.
Older sorts were trading at between £300-£700, adds Mr Pepper. But the real interest is in mower/conditioners with the prospect of two or three more grass cuts still to come. A Kuhn FC300 with four seasons use took bids to £5500 – "indicative of trade if stored well and kept clean".
Balers were also in demand. An ex-farm John Deere 550, fitted with a wide pick-up went to £5500.
On the tractor front, three JCB 155-65s, all L or M-reg, sold for between £15,000 and £16,500. Two of these were exported. The combine market remains tight with limited export opportunities. Only half the 24 combines entered were sold, reflecting trade elsewhere. Top bid was for a F-reg Deutz was £10,800, with older New Holland 8050/8060s back at £6000-£6500. *
Safeway deal secures future
PROSPECTS for beef and lamb producers supplying the Bedford-based Dawn Cardington abattoir appear more secure. From today, a new deal makes it a dedicated supplier to Safeway.
According to managing director Mark Ridout, although there is no producer club, the plants 800 suppliers are expected to retain freedom on type of rearing system and feed used. One imminent change may be the switch from using the plants own graders to using MLC staff *
Once stores and grazing cattle are finished, they should be marketed or imports will be sucked in, warn abattoirs.
June 14 Special June show and sale of Spring lambs. Skipton. Craven Cattle Marts (01756-792375)
June 15 Dispersal of entire Coneygar herd of Holsteins (330 head). Winsford. Wright-Manley (01270-250500)
June 15 Dispersal of the Sylvanna herd of Holstein Friesians, baling equipment and leasing of 265,000 litres of quota. Tring. Abbott Anstey & Reader (01296-715725)
June 15 Collective sale of hi-genetic Holstein heifers from south-west breeders. St Austell. Greenslade, Taylor & Hunt (01935-423474)
June 16 Sale of dairy processing equipment on behalf of St. Ivel. Taunton. Drewery & Wheeldon (01427-616118)
June 16 Evening sale of tractors, Matbro, Keenan feeder and other machinery. Chester. Wright-Manley (01270-250500)
June 17 Sale of Hereford cattle, arable and grassland equipment. Shrewsbury. Barber & Son (01630-652314)
June 17 Lancashire Holstein Dairy Show & Sale. Lancaster. Lancaster Auction Mart (01524-63308)
June 17 Sale of 104 Holsteins from the Casina herd to include all milking cows and in-calf heifers. Crewe. Wright-Manley (01270-250500)
June 18 Dispersal of 220 Holstein Friesians, 12/12 direct line Surge parlour, irrigation equipment and leasing of 600,000 litres of quota. Pulborough. South East Marts (01324-844874)
June 18 Sale of 100 heifers and some young-stock from the Brydan herd of Holsteins. Llandelio. Bob Jones-Prytherch (01558-822468)
June 19 Sale of tractors and grassland equipment, Darikool milk tank and cooler, and feed barriers etc. Buckingham. Abbott, Anstey & Reader (01296-715725)
June 19 Sale of dairy and beef heifers, grassland equipment and polytunnel. Preston. Richard Turner & Son (01200-445376)
June 19 Sale turf farming tackle including mowers, cutters and floatation tyres. North Lincs. Perkins, George Mawer & Co (01673-843011)