Here’s what the experts reckon could be in store for the dairy sector in early 2011.
With rising feed, fuel and fertiliser costs and no signals of any dramatic shift in the milk price the dairy trade is unlikely to see any real upward movement in the first half of the year, according to Christopher Norton of Norton and Brooksbank. “We could even see more cattle coming to the market due to these increased costs.
“There are several herds that were until this winter making a sensible profit, but the rapid jump in costs will be making some of these people think very carefully about their futures. They’ll not even be standing still at the current milk price and once they start to lose money they’ll be looking at every other option possible for their land.
“The increase in black and white inseminations a couple of years ago as a result of a heifer shortage then could see a lot more surplus heifers come to the market now too.”
And, with the likelihood that more cattle will become available it is likely that those who do want to buy will be more choosey about the cows they purchase, he adds. “The simple truth is that they’ll be able to be a bit pickier and this will reflect in the trade. While the best cattle will still be a good trade, the likelihood is that trade for the average types will be easier than it has been in the past years.”
Comments which are echoed by Derek Biss of Greenslade Taylor Hunt, Somerset. “We’re likely to see a strong trade for the best in the first three months of the year as people look for fresh milkers which aren’t about in any number. But the trade for the second quality stock doesn’t look like being nearly as good. The trade took a £200/head fall for the second quality cattle last year and the same could easily happen again this year.”
Longer-term Mr Biss feels the youngstock trade could be patchy this year too, with buyers being more selective and prices likely to drop further. “Although once UK prices hit parity with those for imported stock they won’t fall much after that. Another £200 off youngstock prices would see them reach import prices and that is likely to be where they settle.
According to Mr Norton TB could be the only real driver of demand in some parts of the country, with people looking to replace cattle that have been culled. But there is still no light at the end of the tunnel for many people in TB hotspot areas and although some of them may want to sell their herds they are finding it impossible to do so as they are constantly having cows going down with TB.”
On the pedigree front he says there are few major sales lined up yet, but the Huddlestone dispersal for the Cope family due to take place on 1 February could be a good indicator of where the trade will go this year.