30 August 2002

Stock short as farmers stick to milk

By Simon Wragg

DAIRYSTOCK values are likely to stay firm this autumn as producers decide to stay in milk despite the depressed outlook, making replacement stock hard to find.

"The listings say it all – there are few sales booked for autumn and winter on most firms books," says Christopher Norton of Glos-based Norton & Brooksbank. "There isnt the flush of replacement heifers or young cows producers had hoped for – we are still witnessing the ramifications of foot-and-mouth."

Demand in the south-west is especially keen as restocking programmes vie with TB-affected herds for replacement stock, reports Taunton-based auctioneer Derek Biss of Greenslade Taylor Hunt. "Given the milk price, competition is remarkably strong. For example, the recent Dinnaton herd sale averaged £1033/head – I doubt well see that sort of trade again for some time.

"Im bullish about prospects for the autumn on that basis. Producers are being very resilient given a spread of milk payments of 12-19p/litre," adds Mr Biss.

As a guide, young pedigree commercial cows and heifers are trading soundly at £700 plus and four-figure bids are not uncommon for superior genetics, says the trade. On a commercial footing, older cows still attract bids of £550-650 for sound third and fourth calvers, although age soon pushes values back to £300-350.

With little prospect of a substantial rise in payments for milk, producers will remain under pressure, pegging investment, warns Wright Manleys Clive Norbury. "That said, Im not sure well see many producers exiting milk this autumn.

"Certainly, the OTMS will be busier as producers clear out the poorer animals, but numbers for regular dairy ring sales will be hard to come by."

There are regional challenges to an otherwise strong market for replacement stock.

The collapse of Amelca, the fledging £19m farmer-backed processing venture in Staffs, is likely to disrupt trade in the Midlands until its future is determined. "Its very bad news for our local clients and may well affect their intention to purchase cattle until an outcome is known," forecasts Mark Elliott of Uttoxeter-based Bagshaws.

Trade is also cautious in the north-west, reports Lancaster-based auctioneer John Hughes. "It is a testing time – many producers are completely disheartened with the milk job and its only low numbers that have shored up bids.

"Even so, heifers and second calvers are £50/head back on pre-summer trade in this area. Breeders are not tempted to sell until the market picks up." &#42