Rearing calf trade boosted after CPAS extension

By FWi staff

FARM Minister Nick Browns last week to extend the calf processing scheme until 31 July will remove another 300,000 beef animals from production, estimates MLC economist Duncan Sinclair.

Inevitably, there will be a knock-on effect on finished beef volume next year. In January, the scheme took 44,531 dairy-type and almost 5000 beef-type calves off the market.

But the scheme, originally destined to end in November last year, will definitely not be extended again, says Mr Brown.

Signs are that the trade for rearing calves has improved with announcement of the schemes extension.

Buyers who were holding off in the hope of rock-bottom prices at the end of March were back in the market at Gloucester this week, to improve on the previous weeks average by about £5 a head. Auctioneer Jon Pullin reported two buyers bidding well above the scheme price for Friesian bulls.

“Some people may already be thinking they are paying too much for continental cross calves,” he said. “Im sure the better Friesian bull calves will find a home when the scheme ends. But I cant see the calf trade ever being again what it once was.”

Aberdeen Angus and Hereford cross heifer calves that result from a herds policy of breeding its own replacements are likely to be hardest hit. The cost of registration – to be introduced next year and expected to be at least £5 – will be a further disincentive.

ADAS business consultant John Elliott is advising his milk producer clients to seriously consider the impact of the end of the scheme on their businesses now, rather than waiting until the end of July.

“The first thing is to consider any opportunities there may be to utilise existing resources of buildings, labour and feed to finish some of the better calves yourself,” he says, although he admits that any widespread shift in practice would impact on prices.

Prolonged weakness in the cull calf market may force more producers to reconsider their policy of breeding replacements and switch to a flying herd system, he believes.

Meanwhile, says Mr Elliott, milk producers should review the bulls being used, and plump wherever possible for beef breeds such as the Belgian Blue that always attract buyers.

The MLC cautions anyone considering rearing dairy beef calves firstly to secure an outlet for the product before starting.

Next, calculate whether the figures will stack up to yield a profit on a return that can be expected to be 15-20p/kg lower than that for better beef types.

The only thing that would revitalise the trade in the lower order of rearing calves would be the reintroduction of the live calf export trade.

Many Continental producers would be happy to see them back, but there are too many political issues at stake, and at best that prospect is a long way off.

The current rate for male calves slaughtered before reaching 20 days old is £58.89/hd.