Top quality steers stay in demand
THE upturn in prime cattle prices that put an edge on demand for stores appears to be over – but auctioneers expect returns for top quality steers to hold in the short-term.
"We are getting calls from finishers as far away as Leics who have left it late to buy and cannot find what they want," says Jim Evans of Welshpool Livestock Sales.
"Rearers with decent stores on green or blue CIDs should make well over £1/kg, but the market for second quality steers and heifers is generally weak and likely to remain so.
"The potential to draw one or two premiums now dictates price because people are trading paper money as much as they are trading cattle," says Mr Evans.
Terry Court, chairman of Hereford Markets, agrees that quality and premium payments are the two main influences. But, he says, finishers also remain uncertain about prospects for the finished trade, and there is evidence that the banks are urging some clients to be cautious about spending.
"The message for some store cattle sellers is clear. If they want a future they need to change their outlook and find the most economic way of producing higher quality stock, even if this means changing breed," says Mr Court.
Auctioneers admit, however, that the price of even the best animals will drop if shortages of housing and winter fodder force big numbers onto the market.
During the last full week for which figures are available, Limousin cross steers between 300kg and 399kg averaged 93.6p/kg compared with 100p/kg last year. Hereford cross were typically 69.1p/kg, or 19.7p below the 1997 level.
The year-on-year price of heifers was around 20p/kg down. And the appalling returns on store heifers – some have sold for as little as 40p/kg – could be an opportunity for specialist finishers to make a good margin.
Senior Meat and Livestock Commission economist Duncan Sinclair reckons that when premium has been drawn on 90 male cattle, heifers should be considered. "A low-priced good quality heifer is a much better bet for making a reasonable margin than an unsubsidised steer," says Mr Sinclair. *