Large store cattle price rises place profits in jeopardy

5 February 1999

Trouble in store? As confidence comes back to the finished cattle trade, store buyers are being advised to remain cautious with their bidding.

Large store cattle price rises place profits in jeopardy

By Tim Relf

STORE cattle prices have risen dramatically as finishers fill up the sheds.

The increase – up to £100/head over the last couple of months – comes on the back of the stronger finished cattle trade.

While the rise has been welcomed by store sellers, it has raised concerns that some buyers may be pricing themselves out of a profit.

"Finishers should not let themselves get overexcited," says John Bell of the National Beef Association. "The mood has to remain cautious."

More bullocks are expected to move onto the market in March when their BSP retention period is completed, he says. And importers may not be able to resist the purchase of beef from cheaper Irish cattle for ever, especially if Irish traders continue to have problems with the Russian market.

But with average finished prices recently rising back above 90p/kg, it could be the market has turned, says Mr Bell. "The downward spiral the industry has been forced to endure since summer 1997 could have ended. Finishers now have an opportunity to make money from beef cattle at last – as long as they buy store cattle carefully."

Meanwhile at Ashford, Kent auctioneer Richard Wood says the rise in store values has been biggest among the female stock. Yearling heifers that two months ago might have made £100 to £150 can now make £200 to £250. "Before, some of the smaller heifers were hardly saleable. Now people are looking for them.

"All farmers wanted was something to give them a bit of confidence. The hike in the fat cattle trade has done this," says Mr Wood.

Scott Donaldson, auctioneer at Hexham, Northumberland, says people who are unable to progress with groundwork are taking this opportunity to source stock. "When the weather comes right and people can get on the land, they will want to crack on with that."

The upturn, says Mr Donaldson, is about £80/head since October, making stores now worth more than they were 12 months ago.

Michael Bowe, who takes the rostrum at Penrith, Cumbria, puts the rise at up to £100/animal. "Farmers are a resilient bunch. They dont like to see a building empty if they can have stock in it.

"Store cattle buyers have stuck their necks out for the last two years and made little – or no – money. Its remarkable that they have come back for a third year."

Mr Bowe says its mostly the positive outlook thats driving demand, with well-fleshed, green-carded bullocks of nine months plus now able to make more than 100p/kg. "People are looking to the future. You need something in the shed to sell if it becomes a good trade." &#42

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