Resist long-term deals and shop around, farmers advised

Beef farmers should not “sign their lives away” on exacting deals with deadweight processors desperate to secure cattle at 450p/kg, warn industry leaders.

Power should rest in farmers’ hands in the run-up to Christmas as a weak pound puts pressure on import orders and pig and poultry sectors report supply challenges.   

Finishers have been told to shop around for the best price and discuss trade with farming colleagues, rather than committing to predetermined numbers on exclusive terms for fixed periods.

See also: Discounted youngstock create opportunity for some farms

As is often the case when supplies are tight, some deals involve a three-month commitment; in one case this included the farm’s lambs as well as its beef.

One source said beef prices were a mystery, and people didn’t know whether to value English base prices at 440p/kg or 460p/kg. Sterling had strengthened but was still weak.

Confidence affects calves 

Confidence in long-term beef values was seen first-hand at Bishop Castle’s suckled calf sale last week (20 October), which reported averages of 340p/kg and 326p/kg for steers and heifers, respectively.

Calf trade has been mixed, with forage availability, winter costs and the size of cattle all hugely varied this year.

But Halls auctioneer James Evans said the availability of suckler-bred cattle was falling, which helped lift steer trade 38p/kg.

“Bullocks were definitely easier to sell this year, whereas last year it was the heifers,” said Mr Evans.

“We had buyers around the ring we hadn’t seen for three years. We sold 240-head, whereas last year we sold 270, but I expect there may be some calves still out there for the November sale that have grown slower this year due to the dry weather.”

Premium for weight

National figures from Defra showed September kill was unchanged on the year for steers. But lighter carcass weights of 355.4kg meant these equated to 1,600 fewer carcasses worth of beef in the supply chain.

Barbers Auctioneer Bernie Hutchinson said a major challenge was butchers wanting heavier cattle to manage their costs, and some finishers selling cattle early to control feed costs.

Mr Hutchinson said: “Some butchers are wanting cattle 50-80kg heavier, but the cost of feed means some cattle could do with weeks or maybe a month longer on feed [to reach that weight].”

He said the approved finishing units (AFUs) and other finishers were taking a punt on the dairy-bred cattle at 210-230p/kg.

Some buyers fancied improving these cattle further by capitalising on the prime ring on a Green market day.