The outlook for 2011; Beef

With the New Year now upon us, here’s a view of what the beef sector is in store for in the early part of 2011.

Beef finishers should expect a solid start to 2011, with a shortage of cattle coming forward following the traditional peak in numbers seen in the pre-Christmas trade, according to Paul Gentry of Newark Livestock Market.

“As ever there were plenty of cattle finished before Christmas to pick up the best of the trade ahead of the festive season. On the back of this I expect there to be fewer cattle coming forward for slaughter in the first month to six weeks of 2011 and the trade will be governed by the number available.

“That said, there still needs to be a greater understanding from the processing end of the trade about the costs of production on these cattle and a realisation that without fair prices some finishers will simply come out of the job altogether.”

Any shift back in the trade will see a gulf open up between the cost of production and the sale price and with the price of feed where it is many finishers simply won’t be able to stand it for very long, says Mr Gentry.

“Anyone feeding any number of cattle has had a hard 12 months, particularly following the electric store cattle trade seen last spring.

“But despite that I expect stores to still be a strong trade come the spring, with plenty of people keen to buy them. There are a good number of people who traditionally feed their own grain but who have capitalised on the strong grain trade and sold it instead of feeding it.

 

“They will also have finished all the stores they bought last year and come the end of the tax year could well have money burning a hole in their pocket. They’ll want to re-invest in some stores to keep the money in their businesses.”

On the breeding front Mr Gentry fully expects the trade to be strong, but maybe not as strong as it has been in previous years. “There have been some exceptional prices paid for breeding heifers and cows in recent years, but this is unlikely to continue. While the best crossbred heifers with calves at foot will be a good trade the middle of the road stock could well slide back a touch.”