Conditions right for suckler quota rise

18 June 1999




ROYAL TICKETS -SAVEATHIRD!THIRDOFF

ARE you ready to farm in the 21st century? Make sure your business is in the best position to cope with the challenges ahead by visiting the 1999 Royal Show on 5-8 July at Stoneleigh in Warks.

Firmly established as Europes premier exhibition of farming, food and the countryside, this years Royal Show emphasis is on practical, take-home messages for the modern farmer.

Livestock

More than 7000 animals from the finest pedigree livestock to rare breeds will be competing for a coveted first prize in the shows world-famous competitive classes sponsored by its major backer, NatWest.

The show will highlight the latest issues affecting farmers in the Sheep Technology Centre and the Commercial Beef Focus sponsored by Marks & Spencer and Merial. Advice and information is available on topics from cost-effective feeding and reducing overheads to selecting superior breeding stock and delivering what the market wants.

Marks & Spencer is sponsoring the Royal Show National Lamb Carcass Competition and the Special Prime Lamb Competition to demonstrate best production practice.

Arable

NIAB focuses on the 1998/99 recommended list of varieties and next years candidates in its display of 26 wheat varieties. SIMAC looks at what GMOs really mean for the farmer.

Advice to help meet the demand for home-grown organic produce is at the Organic Food and Farming Centre, with an emphasis on mainstream organic farming to help producers assess if conversion is right for them.

Machinery

Over 40 acres of the showground is devoted to the top names in high-tech machinery, with everything from tractors, combines and milking machines to sprayers, spreaders and ATVs.

A new collaboration with major research institutes and commercial companies on the RASEs Precision Farming Feature looks at the need for farmers to identify the clear economic and environmental benefits of the latest technology and to assess its value on farm.

Farming and Countryside

Taking as its theme "How you can afford to be green when youre farming in the red", the RASEs Farming and Countryside area, sponsored by Hydro Agri and Lloyds TSB, highlights the issues of environmentally-appropriate farming systems.

Tips on the latest developments in integrated farming systems, arable stewardship options, field margin displays and the right approach to conservation headlands can also be found from a range of experts including the Environment Agency and MAFF.

From the finest British food and international cuisine to top horse riders and rural crafts, the 1999 Royal Show has plenty to offer the family for a great day out. It will help you and your family make the most of your business.

FW readers can save up to 33% on Royal Show gate prices by purchasing tickets in advance through the Royal Show hotline (0121-767 4099) and quoting reference FW1.

The offer runs until June 25, and lines are open Monday to Friday 9am-8pm and Saturday and Sunday from 10am-5pm. Advance ticket prices are adults £8, children age 5-15 and senior citizens £4.

Conditions right for suckler quota rise

STIFF competition for suckler cow quota, fuelled by dairy dispersals, is likely to see prices rise over last year with the opening of trading this week.

Even before junior farm minister Lord Donoughue signalled the start of proceedings on Tuesday and transactions could be signed or settled, brokers had begun talking up the market.

Many believe the number of dairy farms quitting production with ailing milk prices will have a major impact on demand as they look to swop dairy stock for beef cattle.

Coupled to this is the proposed rise in suckler cow premium under Agenda 2000 which will take effect next year. According to Perthshire-based broker Tom Taylor it could significantly improve the current payment of £112 plus £27 extensification bonus.

And with so many farm incomes under pressure, that extra subsidy counts. "Its especially the case when most were expecting the k to strengthen and push subsidies further still, not drop 10p in value."

At the moment, many producers are still at a crossroads, he says. Under Agenda 2000 most enterprises look bad, but out of the bunch "beef looks possibly the better option".

If that wasnt enough to excite speculators, unconfirmed reports that many looking to acquire quota from the national reserve missed the deadline for applications will have added pressure to the price push, explains Mr Taylor.

He also suggests competition from suckler men in Less Favoured Areas will build as many look to increase cow numbers and subsidy claimed to "tread water" on the income ladder.

With the EU looking to scale back quota next year by a suggested 40,000 units nationally, equivalent to 2-3%, they may have to stomach a hike in values to be "better safe than sorry".

Prospects for LFA quota is £180-200/unit for purchase and leasing at £50-60/unit. That is at least £20/unit and £10/unit up on last year, respectively, he adds.

Glos-based David Pullen of Bruton Knowles agrees the market will be strong. His prediction for non-LFA quota is similar with a £20 premium on last years trade. "Others put it a lot higher, but I think its unlikely."

One clear change is the volume of quota wanted by individual buyers; it has increased. "Its not uncommon for producers to be looking at 50-70 units; quite an investment and much higher than before," says Mr Pullen.

Again, subsidy is the driving force, he says. "If producers can claim suckler premium on cows and beef subsidy on the first 90 male calves, then theres money in it. Also, if CAP proposals to allow a reduced claim on heifer calves comes into effect then that will add to demand."

If this talk is mere speculation, the true test is currently reflected in stock values. Evidence from the sale ring would confirm expectations for a busy trading period through to early December, says Cheshire-based Richard Baker of Wright-Manley.

"In Ruthin, my native area of Wales, sucklers with calves at foot have been trading at £800-£900 a couple. Thats almost back to pre-BSE values. Its going to be busy," he says. &#42


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