ITS been a year of two halves for beef farmers – bad and bad. Unfortunately, the outlook for 1998 isnt any better. According to the Meat and Livestock Commission, finished steer values are set to spend much of the next 12 months at between 90p/kg and 95p/kg lw.
There probably wont be the big seasonal variation seen in 1997, however, when values rose – contrary to the seasonal norm – in the summer.
Taking its toll on prices will be the on-going absence of an export market, although a "token" amount could leave Northern Ireland under the certified herd scheme in 1998, reckons the MLC.
Volumes heading into intervention stores have also slumped, as British traders – always wary of the process – have seen green £ revaluations leave tenders over-priced when converted to ecus.
On the demand side, beef is set to build on 1997s 14% rise with a 2% increase to 840,000t in the year ahead.
This comes against a backdrop of falling cattle supplies, with a 4% decline in prime slaughterings to 2.17m expected. This reflects the contraction in the dairy herd as better genetics prompts higher average yields per cow. At the same time, lower suckled calf and cull cow values will lead to contraction in the suckler herd.
Also impacting on supplies will be the calf processing aid scheme which, over the last 12 months, has taken about 600,000 calves out of the equation. Of these, about 10% were beef-bred animals.
As the new year opens, farmers should aim to reduce the number of prime cattle ending up in the over-thirty-month-scheme.
The current figure of about 1000 a week is, says the MLC, "disappointingly high".
Meanwhile, the industry is set to face extra charges, among them the removal of the rendering subsidy. Predictions put the additional cost these represent at £38 per animal slaughtered.
Income from subsidies will also fall, following this years green £ revaluations. Beef special premium rates for steers and young bulls are predicted to be £84.32 and £104.70/head respectively, with a suckler cow premium of £112.40/head. Extensification premium should be £28, with £40/head paid to those adopting a "super-extensification" policy.
For many, 1998 will also be a year of two halves – very bad and very bad.n