The beef price crisis has left the sector on a “knife edge”, with farmers considering cutting herd numbers or looking at quitting altogether.
Even though the all-steers deadweight price has stabilised after slumping to 326.9p/kg a fortnight ago, producers said it remained too low to turn a profit. Many are now looking hard at the scale of their future beef business, Farmers Weekly has learned.
Beef finisher Geoffrey Rowe, who runs 220 cattle on 65ha in Praze, Cornwall, said he sent four bullocks to the abattoir eight months ago and got £5,760 back.
For four he sent last week he was paid just £3,700.
Mr Rowe said he did not have cash to afford good store cattle, so was considering stopping production. “There are a lot of people afraid to speak out because they are tied in with contracts,” he added.
“It is very likely that this time next year I will not be here. What are the supermarkets going to do when we are no longer available?”
Mr Rowe said politicians were not standing up to supermarkets, which had dropped prices on their shelves while returns at the farmgate fell.
The farmer share of the beef retail price dropped from a peak of 59.8% in May 2013 to 51.3% this March.
John Hoskin, National Beef Association director and 2010 Farmers Weekly Farmer of the Year, said the price needed to return to 350p/kg quickly, which would still only mean breaking even for many producers.
“People are looking at it very hard. Some are easing back on [cattle] numbers, some will increase their ewe flock a bit or cut down some of the personnel and some of the inputs, building in a low-cost base,” Mr Hoskin said.
He added that he had become cautious about the numbers of cattle he was buying, as the steadier price of stores bore little relation to the market return at the end of production.
NFU Cymru livestock committee vice-chairman Dafydd Jones said many farmers were disillusioned with beef production.
He said many finishers who bought expensive stores in the winter were now losing about £300 a head, which could have a knock-on effect on the autumn store sales.
“The suckler cow industry is on a knife edge at the moment and people are thinking about what to do in the future,” he said.
Livestock Auctioneers Association chairman Robert Addison said very few suckler producers were increasing their herds and the price needed to be raised to a point that would give everyone a fair margin.
Signs of recovery in the beef market
The cattle trade has shown signs of a tentative recovery in the past month after the plummeting prices of the spring.
The GB all-steers deadweight price rose 1.1p/kg to 328.3p/kg in the week ending 19 July and improved 0.3p/kg seven days before.
Quality Meat Scotland head of economics services Stuart Ashworth said lower slaughter numbers were helping prices, though market sentiment remained fragile.
The higher price of store cattle last winter means farmers are losing about £300 a head at slaughter.