A NEW market for plainer dairy-bred calves may soon emerge ending the uncertainty for producers once the Calf Processing Aid Scheme disappears.
Auctioneers believe these calves may trade well below £10 each. But prospects may be improved if they are fed to give some frame and reared for processing in to low-value products such as mince and burgers.
“If the dairy men can hold on to these calves, feed them milk and get some shape for rearing there may well be a demand,” says Glos-based Jon Pullin of Bruton Knowles.
At present, plain dairy-bred males are fetching about £48 each from dealers entering them on to the CPAS. “But some of the better shaped Friesian-type bull calves have been trading for £70-£80.”
Once the CPAS ends many believe prices will collapse, particularly for smaller traditional types. “Even if theres a market from finishers which would stand £20-£30 each, thats got to be competition for knacker men going from farm to farm and offering £5 for culls.”
He suspects up to 30% of calves currently going on to the CPAS could be fed and sold on for rearing.
It is possible that some dairy cross heifers may also be taken for processing. That would allow a two-tier trade to be developed with better Continental types being streamlined towards the prime beef market, as suggested by the National Beef Association.
And industry is beginning to act. Processor ABP has already launched a scheme to encourage producers to rear these calves on contract and is offering a selection of hand-picked rearers a guaranteed return. Others may follow suit.
“Theres a need for processing meat,” says Mr Pullin. “Some producers have kept their dairy calves and reared them. One has even suggested that, when finished, they dont fetch much less than some plainer Continental crosses.”
But he is less inclined to suggest what demand there is likely to be. Many predictions have centred on the numbers going on the scheme, but this does not account for the loss of the export trade for the veal/bobby calf markets, he says.
“The shortfall may not be as large as some people imagine.
“If youre not too worried about whats standing in the yard then it could be an opportunity. If theyre cheap and you can claim a subsidy on males before slaughter there may be a margin in them.”
In particular, producers should look out for the better Friesian-type bull calves, he says. “But the drive for Holstein breeding in most dairy herds has cut the numbers back.”
The concern for prime beef finishers is whether a surge of dairy-bred calves being reared and entered for Beef Special Premium may breach the UKs ceiling leading to aid scalebacks. That will depend very much on demand.
In general, prospects for the calf market look good, he adds. Top class Charolais and Belgian Blue sorts will trade for between £150-£180, he suggests. “Good calves will remain strong; the bad ones will remain hard to shift, but there may still be a market for them.”