Throw-off Short-Term Dairy Beef Planning Shackles
07/08/05

The English dairy beef sector will miss out on the golden opportunity offered by a likely decline in both domestic bull and heifer supplies from 2006 coupled with a resumption in normal beef exports if it continues to be shackled by short-term planning.

This is the urgent warning issued to dairy calf producers, rearers and finishers by the English Beef and Lamb Executive (EBLEX) for the coming autumn, following its analysis of both the latest BCMS passport registration data and current plans for the Older Cattle Disposal Scheme (OCDS) following the OTM rule change.

BCMS figures for the first six months of this year show total GB calf registrations down by some 110,000 head (6.5%) on 2004. This is in addition to the 70,000 head decline in registrations recorded in the final months of last year once stock became ineligible for BSP and appears to be concentrated on the dairy sector - reflecting the extent to which Holstein bull calf values, in particular, have been hit.

Altogether, the headage decline already recorded is calculated to remove some 50,000 tonnes of beef from domestic supplies from the end of 2005 onwards. To this must be added the knock-on effects of the extra heifer retentions of up to 240,000 head/year which will be needed to maintain the breeding herd as a consequence of the current three-year OCDS proposals for disposing of animals born before August 1996.

The resultant decline in annual GB prime beef production likely from 2006 will do much to offset any short-term impact on the market of extra beef supplies resulting from the OTM rule change. Especially, with the progressive re-establishment of normal beef exports also widely anticipated over the year, and the continued serious shortage of manufacturing beef throughout Europe.

Under these circumstances, all parts of the English dairy beef supply chain are urged to plan ahead this autumn on the basis of realistic assessments of the 2006 market rather than current 2005 values. In particular, everything possible needs to be done to minimise the unnecessary wastage of dairy calves from the food chain over the coming calving year.

EBLEX costing projections from last autumn indicated gross margins of more than £100/head before calf costs for Holstein bulls finished off cereals at 12 months of age with an -O3 price of 140p/kg deadweight.

With the grain price prospects remaining favourable and even the present market paying 160p/kg for -O3 bulls, EBLEX sees little logic in the industry continuing to allow the large annual loss of dairy bull calves seen in recent years, let alone the very much higher loss evident in the past season.