7 August 1998

Unpromising year for beef prices…

BEEF prices are struggling to get back above the 90p/kg-mark – and seem unlikely to do so for the rest of the year.

So says the Meat and Livestock Commission in its latest quarterly Cattle Outlook. The strong £ and the rise in imports from Ireland are suggested as key factors.

Finished cattle averaged 88.7p/kg lw in the second quarter of 1998, down nearly 4p on 12 months earlier. And the recent firming in values was, reckons the MLC, only temporary.

East Yorks farmer Nick Baker did, however, benefit from the recent upturn in trade. The animals he sold three weeks ago, grading U+, made 188p/kg dw – the best price since the early new year.

The rise was, says Mr Baker, attributable to a shortage of stock on offer, as bad weather slowed the progress of grass-finished animals. "But as soon as more cattle come forward, prices could come down."

The poor-quality harvest means barley – originally grown for malting – could now be kept and fed to stock. It has high nitrogen levels, high screenings and low bushel weights, says Mr Baker. The only consolation is that it will make stock feed. "In some ways, Im quite relieved I have got cattle to feed it to."

In a bid to combat the lower prices, Mr Baker is planning to keep heifers longer, taking them to 270kg dw – rather than to between 240kg and 250kg as in the past. A slower throughput does not, however, come without problems on his Bainton Heights farm. "Its causing us aggravation as regards cashflow and building space."

Across the country, meanwhile, the balance between steer and heifer slaughterings is changing as the effects of the calf slaughter scheme – open only to male animals – are felt. In June, for example, steer and young bull slaughterings were down 11% and 21% on year-earlier levels respectively. The heifer figure was 5% higher.

At the same time, intervention is offering no hope to beleaguered producers – with no purchases into GB stores this year. This sudden fall after last year, when net intake was 70,000t, means that overall supplies available for consumption could rise 3% in 1998, says the MLC.

With Intervention Board figures showing nearly 100,000t in store at the end of May, sales of this could also push values down, says abattoir boss John Dawkins. "The extra supply is bound to dilute the market."

Cattle prices could fall further, adds Mr Dawkins, as the summer progresses and bigger numbers finish off grass.

And any lifting of the export ban – although to be welcomed – would be of limited help to the industry. "The value of the £ makes us uncompetitive. Even if the ban was lifted tomorrow, wed have a job to sell it."

Beef market MLC predictions

1997 1998*


(000 head) 2263 2249


(000t) 694 688

Imports 226 210

Exports 0 20

Consumption 850 877

* Estimate

NB: Slaughter fig is prime cattle for human consumption

Cattle prices are unlikely to rise much for the rest of the year.