Calf sales hit best since BSE
CALF sales have picked up close on the heels of store prices, but further increases may need stalling if finishers are to protect margins.
According to John Pullin of Glos-based Bruton Knowles, spirited bidding at last Mondays calf market saw prices recover by £20 a head on last years trade. Calves averaged £94.08 for the 170 head entered. "Its been the best trade since BSE," he reports.
The upturn may be a result of better fortunes for finishers. "Stores were bought well last autumn and with beef prices around 90p/kg liveweight margins have been made. These cattle now need replacing," says Mr Pullen.
Better sorts are still creaming off the top bids. For example, a 38-day-old Belgian Blue bull calf out of a Friesian X Belgian Blue female made £328 at Gloucester this week. "However, that really was a one-off," he adds.
At Chelford Roy Waller of Frank Marshall saw the same days calf trade ease slightly on the previous week with trade discounted by between £10-15 a head. Demand was still their for stronger sort. An entry of 47 Belgian Blue bulls sold to £210 and averaged £129.57; heifers went to £100 and averaged £50.47.
At these prices finishers should buy selectively if margins are to be protected, warns independent beef consultant David Allen. "When beef prices look good and calf prices creep up, finishers rush out and start buying. This hikes up input costs and only serves to put margins back under pressure."
For example, taking MLCs market average for Limousin crosses at £113 each and adding £55 rearing costs to 12 weeks old, these calves put through a barley beef system on feed at £100/t have got to make 95p/kg liveweight to get a margin of £80 before bull premium, he explains.
"Without doubt theres a margin, but unless finishers need numbers to fulfil level supply contracts it may be better to hold off while the market is short," suggests Dr Allen.
Tight supplies may also be pushing up demand and prices of CPAS supplies. Holstein Friesian bulls found a strong trade at Gloucester with buyers paying £63 a head. "These are being sold to rear. While theyll not have the conformation of Continental rivals theyll still collect subsidy," comments Mr Pullin. *