Beef outlook shows opportunities
THE ENGLISH Beef and Lamb Executive sees encouraging opportunities for English producers in the coming year.
This upbeat prediction stems from the forecast that beef consumption is expected to remain comfortably over the 1 million tonne mark, prime cattle supplies are set to fall back, lower calf availability from the dairy herd, and no prospect of OTM animals re-entering the food chain until July at the earliest.
However, the latest EBLEX outlook stresses the need for finishers to plan their late 2004/early 2005 beef marketing carefully and with as much flexibility as possible to take advantage of specific opportunities as they arise while avoiding obvious pitfalls.
The 1% year-on-year rise recorded by the Meat and Livestock Commission in cattle slaughterings in the eight months to August masked an increase of 9% in August supplies alone, as the cold spring delayed summer finishing.
Coupled with a serious fall in summer holiday beef consumption prompted by the very wet weather, this led to a marked reduction in autumn prices from the extremely firm levels enjoyed since the spring.
There are signs that this fall in demand has slowed and the market is stabilising.
On the other hand, beef supplies are rising seasonally and seem likely to be boosted by producers finishing cattle early to qualify for Slaughter Premium before it disappears in January under CAP Reform.
This could well limit the normal rise in beef prices in the run-up to Christmas.
Under these circumstances, English producers would be well-advised to avoid excessive early marketing, maintaining sufficient finishing flexibility to serve either the Christmas trade or an early 2005 market that could well be short of beef.
After all, stock finished better at heavier weights into a firm New Year market without Slaughter Premium could easily deliver better returns than those finished less well into a weaker market at lighter weights with it.
The lack of any decision yet on the OTM rule change means older animals will be unable to return to the food chain until at least July.
This removes a major element of uncertainty for finishers over the first half of 2005.
At the same time, the incentive for a winter store period has been seriously eroded by the disappearance of the second BSP payment.
So a good case can be made for maintaining growth rates to finish male stock, in particular, at a younger age and more profitably from yards in the early summer rather than as older beasts from grass later in the year; especially so with the promise of attractively-priced cereal feeds.
Market prospects for 2005 will also be influenced by the 1.3% annual decline in the overall English breeding herd revealed in the latest June Census; a decline which may be greater in reality as many animals appear to be being retained for their final Suckler Cow Premium.
Equally, more heifers than previously envisaged seem to be being held back as breeding herd replacements, meaning fewer animals in the slaughter chain than suggested by recent Census figures.