By Simon Wragg
EVIDENCE of a return of confidence among beef finishers can be clearly seen at store sales; prices are rising and prime stock values must also if margins are to be made.
At Hexhams weekly market 739 head went under the hammer last Friday. And, although prime beef prices are almost identical to a year ago, store values have edged up.
For yearlings, steers are up 40-60 a head and heifers 40-80 according to breed.
Several factors have influenced the trade, says auctioneer Scott Donaldson.
The prospect that beef prices could increase above the current 91p/kg liveweight average (184p/kg deadweight) has helped.
“Weve also seen a strong demand for prime cattle in Yorkshire and the Midlands where many of our buyers come from outside of Scotland.”
Cattle are drawn from the Borders area down into Co Durham and across to Cumbria.
Theres a traditional influx of heifers at the moment as many steers are still in retention for beef subsidy claims, he explains.
Heifers are benefiting from the introduction of the slaughter premium.
“The little heifers that will be kept for 12-14 months until fit will then be attracting about 34 in slaughter premium.
“And if youre buying them in at 230-250 a head, its helps improve the margin given that finished prices for steers and heifers are similar.”
The shortage of steers for many buyers partly accounts for the gap in values; this will close as more come off retention following beef premium claims.
Last Fridays trade saw Charolais steers averaging 452 with heifers at 366; Limousin steers at 454 with heifers at 352; and Simmental bullocks 502 and heifers at 340 (limited numbers).
Prime cattle values are also closing the price spread between heavier stores.
Having shaken off the 10p/kg deadweight difference for heifers, the gap against a steer on a blue card (with one beef claim to go) has fallen from 120 a head to about 60-80, he estimates.
One area where all beef cattle do well is under the farm assurance banner.
Its hard to pin an exact premium on a days trade, adds Mr Donaldson, but using last weeks entry as an example, 17 out of the top 20 individually priced cattle were farm assured.
“Its an indication, particularly if these cattle are to be sold in Scotland where rules say they must be farm assured from birth to slaughter.”
Auctioneers want more farmers to register to keep as many buyers bidding for stock.
That, they say, is more important that trying to prejudge the assured premium.
The question of presentation remains a vexed issue, he adds.
Those who take time to clip out and dag stores ahead of the sale ring are showing them at their best, but many outdoor finishers want cattle to retain a heavy coat.
The contrast to the finished ring couldnt be more different.
While store values are generally rising, vendors are becoming more concerned at how changes under Agenda 2000 may affect individual businesses.
Changes in stocking rate calculations – particularly where up to 20% of heifers over eight months old can be included for suckler cow premium claims – may force some to sell stock earlier to safeguard subsidy income.
That could see an increase in the number of younger stores marketed, adds Mr Donaldson.