Discounted youngstock create opportunity for some farms

Depressed youngstock prices have left the door open for farms with sufficient forage to play the market on stirks and calves trading 30-40% below last year.

It is still early to call the suckled calf trade, but some expect it to follow the regional pattern of the sheep sales and vary according to forage availability.

The dairy-cross side of the market has been heavily discounted.

Young rearing calf prices have been consistently plagued by cost of production, but a small rally has been reported by integrators and auction marts in recent weeks for fleshy (60kg+) types.

Continental rearing bull calf prices have been back as much as 45% on the year this back end, and generally 30% back, with £165 buying what might have cost nearer £240 last year.

See also: Costs hold back calf prices 30% on the year

Defra’s price series shows the impact of milk powder and rearing nut costs on calf prices.

Continental calves up to three weeks old levelled at £207 and £192 in July and August, £60 lower on the year in both months.

But the number of businesses with sufficient forage is limited, particularly in eastern and central areas, leaving many farms still waiting for a late silage cut to steady nerves.

Costs and the dry summer are leading to worries in Staffordshire, where Mark Elliot and the team at Leek Auctions have seen a two-tier trade, with youngstock severely discounted.

“Electricity, labour, bought-in feed, fertiliser… it’s all rising,” said Mr Elliot.

“Youngstock are particularly hard to shift because people are not only worried about costs, but also some have a lack of forage for winter.”

However, he said store cattle at 22 months old or more for finishing yards remained well competed for and as dear as ever.

Likewise, milker trade was very strong, with 30-litre heifers to £2,440 and £2,340 at recent sales and a fourth-calver from the Boffey family dispersal making £2,260.

An opportunity

Farm business consultant Andy Dodd of the Farm Consultancy Group said a few clients operating in southern and central areas had capitalised on the youngstock market.

“One client previously bought older stores and finished animals, but the outlay is much less in younger stock, and they are less money than a year ago. So they have taken a chance on weaned calves,” said Mr Dodd.

“Wintering smaller calves could be an option for some businesses and a way to make a margin.”

He added that proficient technical graziers and those lucky enough to have had timely rain this summer could maximise the margin from dairy-cross store cattle, particularly natives that could spend more time at grass.

Grass needs time

A warm, open autumn is needed to support youngstock prices, to allow late forage to be made and grass to grow for those that plan to graze cattle before housing, said Frome auctioneer Trevor Rowland of Cooper and Tanner.

Rain has replenished soil moisture, but Mr Rowland said plenty of farms in the South West remained two to three weeks away from a forage cut or a good bank of grass.

However, he said the grass that had come in the past month was of very good quality – almost like spring grass – following the extreme heat that killed swards.

He added that there had been a bit more interest in youngstock, but only to a small level of supply.

“Buyers are counting the cost of winter food,” said Mr Rowland. “But there does seem to be a little more trade than there was for the young cattle.”

He pointed to lack of confidence and forage shortages limiting youngstock prices, with four-month-old stirks back £50-£60 on the year. Values were also being hit by £100 a head or so in the suckled calf ring, he said.

“Last year the spring-born, single-suckled calf trade was £650-£750 a head for heifers and generally £750-£850 a head for steers, with the best at £900. Heifers have been trading at £550-£650 and steers have started at £750.”

Backlogs

Frome had reported decent-quality dairy cross Angus calves at six to seven months old at £450-£500, which represented an opportunity for farms with feed going into winter, he said.

“It depends on the cattle, of course – some will be too soft to put on grass now, and some farms are still waiting for grass to come.”

Mr Rowland said the dry summer meant grass-finished cattle were slower reaching market weight, meaning more cattle are in sheds now.

This means farms either have a backlog of cattle or a shortage of forage, as they had to feed housed cattle in the summer.