Trade Talk: Finishers feeling the pain of beef woes

Iain Soutar, director and auctioneer, Salisbury and Shaftesbury Markets

When I was asked to write this a fortnight ago I was hoping that if I left it to the deadline, I would be able to report that beef trade was on the turn and producers could hope for better returns in the near future.

However, after a couple of weeks where there were signs that trade was on the turn, it was very depressing to hear that major abattoirs in this part of the country were decking prices again this week and kill numbers were liable to be cut as well, which will certainly not help the present backlog.

In these tough times we all have to work together and markets have an important role to play as they will always take your stock and find a customer. The mix of wholesalers, butchers and further feeders means there is generally a customer for everything, particularly the leaner animals with a bit of time before they’re 30 months old. You don’t have to take the massive penalties for being out of spec at the supermarket-supplying abattoirs for grades of cattle they don’t want.

Also, although farm assurance can be a major benefit to access all buyers, if you’ve got the best animal it will generally make the top price, as witnessed in recent weeks at Salisbury, rather than be discounted to 100p/kg for non-assured status.

Livestock markets have an irreplaceable role to play in the sale of store stock and although cattle TB has placed major restrictions on trade, and finished prices have become so depressed, buyers of younger, good-quality cattle have still been out in force and returns for primary producers have been generally good.

Where the real pain has come is for the relatively small number of major finishers who prop up trade for stronger cattle in the store rings and have seen their returns dropping every week for sales of up to perhaps 100 cattle a week. When you work out that the value of a 400kg deadweight animal has dropped £300 in a short space of time, you can work out the damage this is doing to the balance sheets of this important part of the supply chain.

There is no easy solution to the current problem. The fact that beef is a global commodity means there are factors outside everybody’s control which affect prices, but I would like to see a higher percentage of finished cattle going through the live ring. If you want to make your local market “viable,” you’ve got to make sure there’s enough stock to attract buyers.

One thing that I feel should be done is for more of the millions of pounds collected in levies to be spent on promoting the product in this country. Surely in these desperate times, a major TV advertising campaign similar to those run for New Zealand lamb years ago would put beef back in the public’s awareness.