Unrealistically low wholesale and retail mince values are killing off Holstein bull beef supplies - and this should be seen as a warning of what will happen to cross-bred dairy beef and suckler beef if big improvements in ex-farm prices do not kick in soon.

So says the National Beef Association which continues to be dismayed at the apparent inability of some supermarkets, burger manufacturers and processors to recognise that the entire domestic beef supply system is in danger if slaughter cattle continue to be purchased for significantly less than cost.

"Developments at the Holstein end of the market cannot be ignored by anyone who has an interest in maintaining the future provision of UK beef, cautioned NBA chairman, Robert Robinson.

"The current average for O-3 bulls is around 165p and even though some contractors are offering 205p for late autumn this higher price is being turned down by finishers who have done their costings and worked out that if they are paying plus £150 for a 16 week old reared calf the 40p lift in sale value is still not enough to deliver a margin."

"Last November we warned that specialist bull units were being mothballed by finishers looking for at least 215p and when supplies of Holstein bull beef are reduced to a trickle this autumn perhaps the sceptics in the trade will believe us."

"What we are saying now is that the same thing will happen to cross-bred dairy beef, and then suckler beef, unless an average of somewhere around 250p deadweight is paid this autumn and we hope that the penny drops before the dismantling process in these two sectors gains momentum and then becomes impossible to reverse."

According to the NBA the production of Black and White bulls was always going to be the litmus test for industry developments after decoupling.

"It is the simplest of all beef systems. There is no financial attachment to a cow because the bull calf arrives as a dairy industry bi-product and rearing costs are easy to isolate because the inputs are contained within an intensive production system that covers just 12-14 months," said Mr Robinson.

"This made it simple for operators to calculate their margins and after completing their arithmetic so many have given up that anecdotal evidence suggests that perhaps 75 per cent of Holstein bull calves are being shot at birth and in some regions as few as five per cent are being kept for rearing."

"Reaction in the suckler sector will be slower because the strong cow-calf connection makes it more difficult to change the system and some costs can be difficult to identify because they are often shared with other enterprises like cereals or sheep."

"However current low slaughter prices are already forcing both suckled calf breeders and finishers to examine their options and if this unnecessary income squeeze continues we will soon see the first signs of serious suckler cow depopulation."

"The only solution is for retailers and abattoirs to sit down together and work out how to stabilise, through much higher prices, the beef supply system they each say they want and the quicker they realise this the better," Mr Robinson added.