22 August 1997

Stay cool in face of signs

of recovery

HEAD

By Robert Davies

BEEF cattle finishers are being told not to over-react to signs of market recovery.

With well grown store beasts making to 125p/kg, the burger chains back in the market, and demand for prime cattle surprisingly unaffected by summer weather, the warning bells are ringing.

Meat and Livestock Commission senior economist Duncan Sinclair says there is a serious risk that excessive confidence will encourage finishers to over-heat the market for stores and suckled calves. This confidence is born partly from their access to cheap grain and arable by-products.

The slaughter of over 46,000 beef-cross calves in the first seven months of the year, and the reduction in beef breeding cow numbers, will reduce supplies, admits Mr Sinclair.

But the current prime cattle price of 100p/kg lw is influenced by light supplies from Ireland – and a small strengthening of the pound would suck in more imports, cautions Mr Sinclair.

"Finishers must still do their sums honestly, taking all factors into account and remembering that many of them paid too much for stores and suckled calves last year."

This fact is worrying Gethin Havard, chairman of Brecon and Radnor Suckled Calf Rearers, who sell 2500 cattle a year at two October sales.

"Our hopes for a reasonable season are pinned on improvement in the domestic demand for beef, on which we now have to rely, the projected shortage of top quality cattle, and the abundance of fodder and cheaper grain on finishing farms," says Mr Havard.

"Many members also have big fodder stores and some are considering carrying calves until the spring, which would increase demand for those that are forward."

Nick Archdale, who farms in Denbighshire, expects superior quality beasts to sell well through late summer and early autumn, but anticipates buyer resistance to second-quality animals.

As chairman of the Continental Suckled Calf Breeders Association, he hopes that regular buyers who paid over the odds at the groups 1996 autumn sale in Oswestry will be back, and prepared to base bids on realistic predictions of future prime cattle prices.

"Our own figures for finishing show that we kept cattle for company and not profit over the last year," Mr Archdale claims. "Without hill cow subsidies, two beef special premiums and extensification payment, there would have been no margin."

Welshpool auctioneer Jim Evans has seen farmer confidence returning for the last two months, and is bullish about prospects.

"Consumers are prepared to pay a good price for quality beef, and this is being reflected around store cattle rings, where dealers are very active," Mr Evans claims. "I expect the buoyant trade in stores and suckled calves to continue through to the big autumn sales."n