AUCTIONEERS
AUCTIONEERS
COMMENT
MARKET
Lancaster
AUCTIONEER
John Hughes
RECENT rises in prime cattle prices are "long-awaited and much-needed," says John Hughes, but he warns farmers not to get carried away and pay too much for stores as a result.
Finished beef values rose 10p/kg in June, bringing a feeling of optimism. This gradual rise was, says Mr Hughes, better news for farmers than if levels shot up too quickly. "Because then the trade has problems selling it and is desperate to force levels down again."
Bidding for store cattle also became more frenetic in June, taking levels back in some cases to pre-BSE levels.
"Do your sums very carefully," he cautions. The amount people bid is often governed by the money made by the finished beasts they replace. Dont fall into the trap of thinking that boom times are on the way."
The premium payments are driving the buoyant demand. "But you have to wait for the payment – and you may be buying on borrowed money."
The higher prices have prompted some people to sell stores. Numbers, having run below year-earlier levels in the spring, are now above last summer, with more than 120 typically sold a week at Lancaster.
And even heifers which dont qualify for subsidy have been keenly chased. "Some have been dearer in the store ring, in p/kg terms, than they would have made in the finished ring – and it isnt as if they have a lot of room to put more weight on."
The short-keep animals, which have room to put flesh on but can still be finished by the autumn, are most strongly sought after at the moment. The blue-carded bullocks that will need wintering look the cheapest, at less than £1/kg, says Mr Hughes.
The trend away from dairying is also prompting farmers to seek stores. "Ploughing up the land certainly isnt an option for most."
The buoyant demand may not, however, continue unabated, reckons Mr Hughes. "In the autumn, we sell a lot to Yorks buyers who, although buying stock at what looked to be realistic prices at the time, have had a trouncing in each of the last three years. Maybe this autumn they wont come back."
Finished cattle prices, meanwhile, seem set to hold until supplies coming off grass rise. Imports are also down, says Mr Hughes, citing recent trade data. "Long may this continue." The inclement weather is also helping, encouraging consumers to eat more beef than they would in a heatwave.
When it comes to buying calves, meanwhile, there is more realism in what is paid. Last Monday at Lancaster the best Belgian Blue bull calf made £150 and decent continental cross heifer calves can be picked up at £40 to £60.
People are paying realistic prices for calves – but may still be paying over the odds for stores, given the current finished trade.