Store prices threaten finishers margins

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 over-excited,” says John Bell

of the National Beef Association. “The mood has to remain cautious.”

More bullocks are expected to move on to 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.

Scott Donaldson, auctioneer at Hexham, Northumberland, says people who are unable to progress with groundwork are taking this opportunity to source stock.

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.

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.”

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