Beef Cattle Prices Break Free of Abattoir Hold
02/09/08

The National Beef Association is certain that the soaring mid-August surge in prime cattle prices, which took place despite determined efforts by the UK’s most powerful processors to knock late summer’s deadweight averages back to 230p, demonstrates beyond doubt that abattoirs no longer have beef finishers in a choke hold and new rules for establishing the value of prime cattle are being set.

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It says the price arm-lock, with which slaughterers pinned down feeders after the export ban of March 1996 put them in almost total control, has been removed, at last, by a dramatic turnaround in global, and domestic, market forces which have put the farmer on top and should relegate the previously dominant abattoir sector to the role of second player.
“The day when abattoirs alone dictated terms, and farmers took what they said about supplies and price as gospel, is over. Beef cattle are being traded on a seller’s market and this happy state of affairs will continue for as long as slaughter animals are in short supply,” said NBA director, Kim Haywood.

“Current indications are that prime cattle numbers will be tight for years, if not a full decade or more, so suppliers of all slaughter stock, including cull cows, should adjust quickly to these new trading circumstances and assert their new found selling power.”

According to the NBA the selling muscle feeders have exerted over the past month to correct abattoir attempts to collapse their incomes can still be strengthened.

“Finishers did an excellent job last month when they either held back stock until they were paid the price they asked for or withdrew their cattle altogether,” said Ms Haywood.

“However their position, and their incomes, will improve further if they make more effort to study the market themselves instead of relying entirely on abattoirs, or their agents, for potentially self-interested observations on price trends and supplies.”

“Operators on the slaughter side have until recently been regarded by many as the sole source of useful information but as cattle supplies tighten, and prices react, more finishers need to learn to trust their judgement and make informed trading decisions of their own.”

“And after a very long twelve years in which the abattoirs, not all of which treated their customers as well as they should have done, have suddenly seen the pendulum swing completely the other way farmers need to review tactics now they are in control.”

“Over recent weeks it is possible some feeders have brushed off undervalued price offers from abattoirs too sharply when it was still possible to say no while still leaving the way open for a possible lift in the offered price at a later date.”

“But there can be no doubt that after more than a decade of taking it on the chin finishers are at last in a position to have a genuine say on the price needed to persuade them to let their cattle go.”

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