2009-08-11
The National Beef Association is certain that this week’s dramatic recovery in prime cattle, and barren cow, prices demonstrates that the most dominant factor shaping the UK slaughter cattle market is short supplies.
It says that the 10p per deadweight kilo lift expected across most outlets in Southern England for prime cattle this week, coupled with the 5p-8p rises anticipated elsewhere, shows that the huge price plunge forced on finishers since the beginning of July was overdone and unnecessary.
And it warns that overall slaughter cattle numbers will continue to contract beyond 2014 unless retailers immediately work with processors to formulate prices that will encourage suckler calf breeders and dairy calf rearers, to increase their output and install much needed future production rises.
“The £60 (18.5p per dwkg) a head drop in sales income from Southern England’s prime cattle, and the £136 a head (40p per dwkg) national fall in barren cow values, recorded over the past five weeks is now being shown to have been hugely overcooked,” explained the NBA’s Director, Kim Haywood.
“It was justified by confident processor assertions that farm supply had dramatically exceeded retail demand but an almost unprecedented, overnight, ten pence upward adjustment is more than a correction – it is an admission that a serious miscalculation was made and that abattoir stocks are threadbare.”
But rather than highlight the mistake that has been made the NBA would instead prefer to persuade retailers and processors that further pointless fluctuations in farm income will damage their own medium term earnings from beef sales, and that the best way forward for the entire supply chain is to ensure that sufficient beef will be available in five years time.
“It is impossible to improve production levels this year, or next, because the cows that would have produced the cattle that should be coming forward are long since dead,” said Ms Haywood.
“Additional supply falls are in train for 2012 and 2013 as well, because of this year’s, and next year’s, 2.5 per cent drop in suckler cow numbers and the ongoing 2.7 per cent fall in the dairy cow herd too.”
“While on top of this a further seven per cent reduction in total UK production can be expected over 2010 because of the net loss of around 175,000 dairy cross beef cattle born between April 2008 and March 2009.”
“The supply chain damage caused by the latter may be either temporary, or reduced in 2011, because of a recovery in the use of beef bull semen on dairy cows that began earlier this summer but the impact of the contracting national cow herd can only be reversed if farmers are made to feel confident they will earn more from cows that produce calves than they do from selling potential breeders into the manufacturing beef market.”
“Beef farmers in the Republic of Ireland are currently being wracked by a huge crisis in confidence that is certain to see their output reduce severely from 2011-2012, and because alternative supplies from South America will be either scarce, or non-existent, it would make a great deal of sense if retailers concentrated much harder than they are doing at present on the problem of maintaining, and then increasing, future home produced beef supplies,” Ms Haywood added.
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