Farm Assurance Protecting British Feeders from Discounted Live Cattle Imports 11/03/09

Farm assurance is protecting British domestic prime cattle prices because current rules prevent animals from the Republic of Ireland (ROI) retaining their assured status if they are slaughtered in the UK.

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Inexplicably low prices in the ROI, currently around £90-£110 a head lower than those paid by British plants, have provoked Irish finishers into searching out alternative markets.

But hopes of delivering cattle for slaughter by British companies, and then enjoying higher prices, are being dashed - because the animals would forfeit their farm assured status and their beef would have to be ignored by the biggest retailers.

“The rule cuts both ways because UK cattle would also lose their farm assurance if they were killed in other countries, and acquired so-called nomad status, but in current circumstances it is the British finisher that is being protected,” explained NBA director, Kim Haywood.

“However Irish efforts to persuade the authorities to allow either slaughter or store cattle imported into the UK to preserve their farm assurance status can be expected if prices in the ROI are forced down further.”

Recent market movements in the UK also suggest that domestic feeders currently selling heavier cattle over 30 months old should consider whether they would be better off bringing them forward while they are still under 30 months old so they avoid the automatic 20p-30p per dwkg age based price reduction at the 30 month mark.

“On a 340 kilo carcase that is a £68-£102 drop in price, and on top of that, come higher feeding costs because the animals are not only bigger but their feed conversion is less efficient too,” said Ms Haywood.

“The Association has been told that, since the BSE brain testing age limit was raised in January, there has been a noticeable increase in 30-36 month old cattle on the market.”
“However Asda is the only supermarket that is interested in these at present, and prepared to offer UTM (Under Thirty Month) rates, so severe discounts remain and most of these cattle would earn much more money for their farmers if they were sold earlier.”

“At the same time finishers, especially those in regions like the West Country, or Northern Ireland, where slaughter cattle face notoriously heavy discounts compared with other parts of the UK, could consider selling some feeding cattle on as forward stores to farmers in other areas because, under current market conditions, the store animal in these two regions is often the more valuable.”

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